Restorative Justice

Lord Woolf: asked Her Majesty's Government:
	What action they are taking to implement their strategy to develop restorative justice.

Baroness Scotland of Asthal: My Lords, the Government's strategy is to encourage the use of adult restorative justice, to ensure quality of delivery and to continue to develop the evidence base to show what works for adults. We have invested £5 million in pilots and their evaluation, produced best practice guidance for practitioners and introduced legislation to provide further opportunities for the delivery of restorative justice. Restorative justice is embedded in the youth justice system.

Lord Woolf: My Lords, I am very grateful to the noble Baroness for that Answer. Does she agree that, notwithstanding the steps that the Government have taken and that she outlined, more has to be done if we are really to make restorative justice achieve the contribution that is needed to make prison a last resort and deter reoffending?

Baroness Scotland of Asthal: My Lords, I certainly agree with the noble and learned Lord that we need to do everything we can to reduce reoffending. Restorative justice seems to have a very beneficial effect from the victim's point of view. We are working hard to see whether it can also contribute to reducing the level of reoffending.

Lord Marsh: My Lords, does the Minister agree that, given the tragic deaths of five young people over the past six days, it might be an interesting idea and helpful to invite the relatives to participate in this? After all, they know rather more about it than any of us.

Baroness Scotland of Asthal: My Lords, it is important to know when to introduce the idea of restorative justice. Many victims indicate that they would find that helpful. However, we must wait to see whether it would be helpful in all circumstances. I regret to say to the noble Lord that it is not always the first port of call after a tragic death that looks like a murder.

Baroness Thomas of Winchester: My Lords, has the Home Office conducted any research into restorative justice? Is there any information about whether it is beneficial to victims of crime?

Baroness Scotland of Asthal: My Lords, there has been some research, and consistent evidence shows that restorative justice increases victim satisfaction: at least 75 per cent of victims who choose to take part in the restorative justice process are very glad that they did so. The outstanding issue is whether it reduces the offender's likelihood of reoffending. From the victim's point of view, there is clear evidence that it is very beneficial.

Viscount Bridgeman: My Lords, what steps is the Minister taking to encourage schemes being undertaken by voluntary organisations such as the Sycamore Trust in Wandsworth?

Baroness Scotland of Asthal: My Lords, the noble Viscount will know that we are very interested in encouraging voluntary sector involvement in these schemes and in entering into offender management generally. That is why the Offender Management Bill has been brought forward; it will enable voluntary sector organisations to play a better—and, we would say, a proper—part.

Lord Ramsbotham: My Lords, the Home Office document, Restorative Justice: Helping to Meet Local Needs, included the suggestion that local criminal justice boards appoint champions or lead persons to take forward restorative justice work in local communities. How many local justice boards have responded and appointed such people in their areas?

Baroness Scotland of Asthal: My Lords, I do not have the figures with me but I shall be very happy to write to the noble Lord. We try to ask local criminal justice boards to incorporate this approach generally in their work, encouraging participation not just by the champions but by everyone—for example, the corporate alliance, the faith-based alliance and the civic alliance—involving the voluntary sector and the local authorities in these issues too.

Lord Dholakia: My Lords, what action has been taken by the National Criminal Justice Board since it published its plans for this matter on its website in 2005?

Baroness Scotland of Asthal: My Lords, we have invested more than £5 million in evaluating the pilot schemes, and we are waiting for that evaluation. We hope for an outcome to the research by the end of the year but we do not have a fixed timescale. It is very important for us to understand the value in changing the outcomes. We have some very good figures for juvenile justice, where the statistics show that the reconviction rate under referral orders, for example, is the lowest at 44.7 per cent. The Safer School Partnerships are also doing very powerful work. However, it is not clear whether this is transferable to the adult estate.

Lord Elton: My Lords, surely it is an encouraging indication of what is likely to happen in the adult estate. Can the noble Baroness assure us that research is being done urgently to establish whether adults respond in the same way, as I think most of us assume they would? That has a very close bearing on the next Question that she has to answer.

Baroness Scotland of Asthal: My Lords, we are undertaking that research, but it is important that we do not prejudge the outcome. I know that many of us would like it to be so, but whether it will prove to be so is yet to be seen.

Lord Trimble: My Lords, is it the Government's intention to contemplate in England and Wales, as they appear to do in Northern Ireland, restorative justice schemes administered by double murderers?

Baroness Scotland of Asthal: My Lords, absolutely not. We have found that restorative justice conferences have been healing for those who have participated. I have had the benefit of witnessing some of these conferences, and they have been one of the most enthralling and uplifting things that I have been privileged to see.

Lord Harries of Pentregarth: My Lords, this is a development of such significance that I wonder whether the Minister would be prepared to give a Statement and initiate a debate in this House when the research is through, as I hope it will be within a year.

Baroness Scotland of Asthal: My Lords, of course that would be for the usual channels, but I should be very happy for restorative justice to be a subject for debate. I emphasise that, whatever its outcome may be in relation to reducing reoffending, it is incontrovertible that it has a hugely beneficial effect on victims—a healing effect which is much to be valued.

Baroness Howe of Idlicote: My Lords, given the Minister's clear enthusiasm for restorative justice, does she think that enough people are trained in this method? If not, what can the Government do to ensure that more people are capable of administering this technique?

Baroness Scotland of Asthal: My Lords, training is ongoing, and I particularly invite the House's attention to the work undertaken by the Safer School Partnerships. Many of the officers involved are using restorative methods in schools to deal with difficulties between young people.

Prisons: Overcrowding

Baroness Stern: asked Her Majesty's Government:
	How many prisoners are being held three to a cell as a result of prison overcrowding.

Baroness Scotland of Asthal: My Lords, on the last day of February 2007, the number of prisoners held three to a cell designed for two was 1,299. No prisoners have been held three to a cell designed for one—that is, a trebling—since March 1994.

Baroness Stern: My Lords, I thank the Minister for that slightly depressing reply. Is she aware that on the nights of 25 and 27 February, there was serious rioting at Deerbolt Young Offender Institution and that a prison officer suffered a fractured skull? On 26 February, three alleged suicides in prison were reported; on 12 March, two more alleged suicides were reported; and, last Wednesday, a prisoner was found dead in his cell, allegedly killed by another prisoner. Does the Minister accept that incidents such as these are related to the current levels of overcrowding and that our prisons will continue to be dangerous for both staff and prisoners until there is a change in policy?

Baroness Scotland of Asthal: My Lords, I agree with the noble Baroness that it is most distressing and disturbing to hear of any self-inflicted deaths or disturbances. However, it is right that we should hold them in balance, because notwithstanding the fact that the prison population has increased, self-inflicted deaths have gone down. The figure is likely to be marginally lower in 2006-07 than it was in 1996-97. I appreciate that we are in difficult times, but I congratulate the staff on the good work they are doing to keep people safe.

Lord Hurd of Westwell: My Lords, can the Minister give the House any information about the effect of overcrowding on training and education programmes? Does she see a link between the overcrowding that the Prison Service is now enduring and the sharp rise in the reoffending rate for prisoners?

Baroness Scotland of Asthal: My Lords, I do not think there can be a direct correlation. To take the education figures as an example, one might expect that if prison numbers go up, educational attainment will go down, but that is not the case. The number of prisoners engaged in learning had risen to 35 per cent by December 2006, from 32 per cent in August when the LSE took on responsibility for offender learning. It is expected that 36,000 offenders in custody will achieve skills for life outcomes in the 2006-07 academic year. Offender learning in custody is expected to achieve 108,000 other accredited qualifications during 2006-07. The number of basic skills awards achieved in prison has gone up markedly. Although one might have anticipated that things would get worse, in fact, they got better. I commend the ALI report that commends the Government for the good work they have done on education.

Lord Acton: My Lords, how many prisoners are being held more than 100 miles from their homes and families—which has consequent effects—as a result of these overcrowding pressures?

Baroness Scotland of Asthal: My Lords, I do not have figures about those held more than 100 miles away. My noble friend will know that every effort is made to ensure that prisoners are kept as close to their normal place of abode as possible and that the expectation is that they will be within 50 miles. I can certainly write to my noble friend about that figure.

Baroness Sharples: My Lords, are there more writers in residence now that there are more prisoners to be taught?

Baroness Scotland of Asthal: My Lords, I do not know whether we have more writers in residence. They have contributed hugely to the improvement in the attainment level of prisoners and the noble Baroness will know that we have tried to support and encourage them. We are very grateful for all the hard work that they do. I do not know whether the figure has gone up or down, but I shall write to the noble Baroness to make sure that she and the House are aware of it.

Lord Low of Dalston: My Lords, further to the Minister's reply to the noble Lord, Lord Hurd, the Chief Inspector of Prisons, in her annual report, stated that in overcrowded local prisons only 30 per cent of prisoners said they had done anything in there that would make them less likely to reoffend. Is the Minister satisfied with that percentage? Given the enthusiasm she expressed earlier for restorative justice, how does she propose to reconcile the competing demands of restorative justice and prison overcrowding?

Baroness Scotland of Asthal: My Lords, the House will see from the way that we are approaching offender management that two things have to be addressed: first, the proper identification of the risk the offender poses; and, secondly, addressing the needs of the offender to reduce the likelihood of offending. We believe that the end-to-end offender management process we have put in place is the most effective way of reducing offender reconviction rates in the long term. It will enable us to get the proper balance: keeping victims safe but offenders rehabilitated.

Lord Elystan-Morgan: My Lords, does the noble Baroness agree that, as, it seems, three or four years must elapse between the decision to build prison places with Treasury consent and the first prisoner going into such an institution, the short-term solution must be to turn to some other factor? Will she indicate Home Office policy on the urgency of this matter?

Baroness Scotland of Asthal: My Lords, we are clear that those who are dangerous and violent should go to prison, but that there are good alternatives to imprisonment for those who are not—tough community penalties, which bite on the offending and help people to change.

Lord Dholakia: My Lords, is it at all true that, as one weekend paper speculated, cargo containers are to be used as cells in some prisons? While on that point, has the Minister studied the report of the noble Baroness, Lady Corston, on the cost benefit that could be established if women's prisons were abolished?

Baroness Scotland of Asthal: My Lords, there is no truth in the suggestion that cargo containers are going to be used. As the House will know, I commissioned the report of the noble Baroness, Lady Corston, because we want to look at what alternatives there may be for women who are not dangerous or serious offenders, but who could be dealt with more creatively in the community.

Armed Forces: Cyprus Accommodation

Lord Morris of Aberavon: asked Her Majesty's Government:
	What is their assessment of the state of the housing of the United Kingdom's military component of the United Nations force in Nicosia, Cyprus; and who is responsible for its maintenance.

Lord Drayson: My Lords, since this Question was tabled there has been a house fire at RAF Akrotiri in Cyprus, which tragically resulted in the death of three people. A thorough investigation has commenced, and our thoughts are with the families and friends of the deceased at this very difficult time.
	British military personnel serving with the United Nations force in Cyprus are accommodated at the Ledra Palace Hotel. The accommodation there is unsatisfactory, but responsibility for its maintenance lies with the Republic of Cyprus Government. We continue to make representations to them about its condition.

Lord Morris of Aberavon: My Lords, I thank the Minister for that reply and endorse the sentiments he expressed at the beginning. He recently replied to the noble Lord, Lord Kilclooney, that a Defence Minister had visited last September and that every effort was being made through representations to improve living conditions. Did the Minister actually see, in the former five-star Ledra Palace Hotel, what that noble Lord saw recently: electrical points hanging out of the walls in uninhabitable rooms, accounts of sewage coming back from the toilets and a total absence of air conditioning in the bedrooms? What specific action did he insist on, and on what timescale? What has been done since last September?
	When these matters were put to the president of Cyprus, he said that Cyprus paid its contributions to the United Nations. Thousands of British tourists visit Cyprus; are these shameful conditions the best that we can do for our troops?

Lord Drayson: My Lords, I agree with my noble and learned friend that it is totally unsatisfactory. It really is not good enough. Since my right honourable friend the Minister for the Armed Forces visited those facilities very strong representations have been made to the Government of the Republic of Cyprus and to the United Nations. We expect to see improvements made quickly to the accommodation in which our troops are suffering.

Lord Anderson of Swansea: My Lords, I can confirm from my own observations that everything that my noble and learned friend Lord Morris has said is absolutely correct. How long have representations been made without anything being done about them? Is there no adequate inspection or monitoring system, and for how long will we allow this to continue?

Lord Drayson: My Lords, I understand that this situation has existed for several years. It is not good enough and, as I have said, representations have been significantly increased following the visit by my right honourable friend last September. We expect to see improvements made.

Lord Hannay of Chiswick: My Lords, what implications might the recent steps by both Turkish and Greek Cypriots to free up access to Ledra Street and the two halves of the city of Nicosia have for the British UN troops manning that part of the green line? Is it not time to look seriously at converting UNFICIP into an observer force only? That would, of course, have implications for the troops' accommodation that is so clearly unsatisfactory.

Lord Drayson: My Lords, I am not aware of the specific changes that the noble Lord mentions. I will write to him in response to his question. In addition to the representations, we are looking at the actions that we could take ourselves. However, we feel that this is the responsibility of the Republic of Cyprus Government, and we expect them to rectify it. We are looking at other options such as building our own accommodation but, given the time that that would take, the answer is to address the conditions in the Ledra Palace Hotel.

Lord Wallace of Saltaire: My Lords, the British Government have a very large and underutilised sovereign base not far from Nicosia. I assume that there is a good deal of surplus accommodation there. Could that not be part of the solution to this problem?

Lord Drayson: No, my Lords. My understanding is that moving the personnel to another base would not provide a solution.

Lord Elton: My Lords, providing a solution ourselves in the form of bricks and mortar would, presumably, be exactly what the Government of Cyprus want. Is there no other recourse that we can take besides making representations, which clearly do not work?

Lord Drayson: My Lords, the noble Lord may be correct about the purpose behind the lack of progress from the Republic of Cyprus Government. However, we feel that the most productive way to get this issue resolved is to make representations to the United Nations and to the Government.

Lord Corbett of Castle Vale: My Lords, is not the real answer that the British Government should be more robust in making representations to both communities on the island of Cyprus, and to the administrations in both parts of that country, to come to an honourable and just solution so that the country can again be reunited?

Lord Drayson: Absolutely, my Lords. I agree totally with my noble friend. However, while that is happening we must urgently address our troops' accommodation.

Earl Attlee: My Lords, has the Minister suggested that we might consider removing the troops?

Lord Drayson: Of course, my Lords. We look at all options.

Lord Roberts of Conwy: My Lords, what has been the response to the representations made since the Minister's right honourable friend's visit last September? It is now March.

Lord Drayson: My Lords, given that the situation has not improved, it is clear that the results have not been satisfactory. What we really need is action to improve the accommodation in the Ledra Palace Hotel. That is what will address the situation.

Schools: Biometric Data

Baroness Walmsley: asked Her Majesty's Government:
	What regulations they propose to make regarding the collection and storage of the biometric data of children in schools.

Lord Adonis: My Lords, the Government have no plans to make regulations on the collection and storage of the biometric data of children in schools. Biometric data, like all data, are covered by the Data Protection Act 1998.

Baroness Walmsley: My Lords, I thank the Minister for that reply, but is he aware that the practice of fingerprinting in schools has been banned in China as being too intrusive and an infringement of children's rights? Here, it is widespread. We have even had a head teacher tricking three year-olds into giving their fingerprints by playing a spy game. Will the Government ban schools from carrying out this practice, unless parents specifically opt into the system following full and independent information about the so-called benefits of the system and the dangers of identity fraud?

Lord Adonis: My Lords, as I said, biometric data are covered by the Data Protection Act, whereby subjects must be given fair processing notices regarding the data and the purposes for which they will be used. Although children are by law the data subjects, it is normal, particularly in primary schools, for parents to be informed of data collected on their children. My department issues fair processing guidelines for schools, which is explicit about the need to see that such information is made fully available to parents.

Baroness Morris of Bolton: My Lords, notwithstanding the assurances given by the Minister, does he not recognise the genuine concerns to which these issues give rise? These are serious matters of principle. What safeguards are in place to ensure the security of the data once collected? Are there any plans to link these data to the children's information-sharing index?

Lord Adonis: My Lords, these data can be held only by the schools. They cannot be shared more widely. The guidance, which my department issues to schools, says:
	"Data controllers have to provide data subjects with details of the data that they hold on them, the purposes for which they hold that data, and any third parties to whom it may be passed on. This is referred to as a 'fair processing notice'".
	The arrangements are set up fully in the guidance. We believe that the controls are adequate.

Baroness Howe of Idlicote: My Lords, can the noble Lord explain the exact purpose of this activity? I think that most people would be somewhat alarmed by the idea of having fingerprints taken and would connect it with criminal offences. If no research is being undertaken into why these figures are being collected, it seems a little bit vague.

Lord Adonis: My Lords, biometric technology systems are normally used for three specific purposes in schools: library systems, attendance records and cashless-catering for school meals. The use of biometric systems of this kind can, for example, facilitate the take-up of free school meals, as there is no perception of those who are and who are not taking free school meals and therefore there is no social stigma attached. There are very good reasons why these processes are used and I think that most noble Lords who reflect on the matter would regard them as beneficial.

Baroness Carnegy of Lour: My Lords, the Minister usually displays a great understanding and sympathy of what it is to be a child. Is he not concerned about the impression that children will get of what it is to live in a free country and what it is to be British if, in order to get the right school meals and other things, they can have their fingerprints taken? That seems completely astonishing to me. I suggest that the Government think hard about this and change their minds.

Lord Adonis: My Lords, I would be happy to go with the noble Baroness to a school that operates these systems without any contention whatever. So far as the pupil is concerned, once they have provided this information, they have a card that they can use to access library services, free school meals and attendance registers in a more accessible and less intrusive way than was previously the case. As I said in response to the noble Baroness, Lady Howe, in the case of pupils who are eligible for free school meals, there is a great deal less social stigma than used to be attached to people having to show special forms for that purpose.

Baroness Carnegy of Lour: My Lords, that is the trouble.

Lord Dholakia: My Lords, how many schools hold records of children's fingerprints? What plans do the Government have to ensure that these records are not used in identity fraud?

Lord Adonis: My Lords, we do not have the data on individual schools. We regard it as the duty of the school to see that the material is properly safeguarded.

Lord Stoddart of Swindon: My Lords, what happens to these data when the children leave school?

Lord Adonis: My Lords, they have to be destroyed.

The Earl of Northesk: My Lords, the Minister mentioned third parties and therefore implied that third parties may have access to the data. Could he delineate what sort of third parties might have access to the data?

Lord Adonis: My Lords, only those to which clear authorisation has been given by the school. I am happy to specify to the noble Lord the precise circumstances in which that takes place.

Lord Brookman: My Lords, is there any truth in the articles that I have read—I am sure that all noble Lords have read them—that children in the sixth form whose parents wish them to go to university will have to advise someone that their parents themselves had gone to university? According to the articles that I have read, this could have a detrimental effect on their passing out to go to university.

Lord Adonis: My Lords, my noble friend is referring to a different issue, which was raised last week by my honourable friend the Minister for further and higher education. It is indeed the case that we are looking to provide more information on the backgrounds of students who are going on to university, but not in any way to dissuade them from proceeding on to higher education.

Baroness Miller of Chilthorne Domer: My Lords, the Minister has made much of the need for biometric data for school dinner cards, otherwise known as smart cards. Does he accept that you do not need biometric data on them anymore than you do on a John Lewis loyalty card for them to be effective and not to stigmatise the take-up of free school meals?

Lord Adonis: My Lords, this has been found to be a reliable way of ensuring that the services can be made available. The onus is on those who think that it is not a reasonable way of proceeding to make their case.

Baroness Walmsley: My Lords, while I have enormous respect for the Minister, his answer smacks of considerable complacency. This is widespread across the country. Children are being fingerprinted without their consent or their parents' consent. They are being victimised if they do not comply by not being allowed to use the library, by being threatened with exclusion and by being made to go to the back of the dinner queue if they do not have one of these cards. Will he look into this and find out what the real situation is rather than the theoretical one that he has so reasonably outlined?

Lord Adonis: My Lords, there is a certain amount of scaremongering in the noble Baroness's question, which I simply do not accept on the basis of the information that has been made available to my department.

Business

Lord Grocott: My Lords, with the leave of the House, a Statement on Modernising Medical Careers will be repeated by my noble friend Lord Hunt of Kings Heath after 4.30 pm.

Local Authorities (Mayoral Elections) (England and Wales) Regulations 2007

Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the draft regulations be referred to a Grand Committee.—(Baroness Amos.)

On Question, Motion agreed to.

Foyle and Carlingford Fisheries (Northern Ireland) Order 2007

Electricity (Single Wholesale Market) (Northern Ireland) Order 2007

Northern Ireland Policing Board (Northern Ireland) Order 2007

Lord Rooker: My Lords, I beg to move the three Motions standing in my name on the Order Paper.

Moved, That the draft orders laid before the House on 6 and 19 February be approved. 10th Report from the Statutory Instruments Committee and 12th Report from the Merits Committee, Considered in Grand Committee on 15 March.—(Lord Rooker.)
	On Question, Motions agreed to.

Planning-gain Supplement (Preparations) Bill

Read a third time, and passed.

Consolidated Fund (Appropriation) Bill

Lord Davies of Oldham: My Lords, I beg to move that this Bill be now read a second time.
	Moved, That this Bill be now read a second time.—(Lord Davies of Oldham.)
	On Question, Bill read a second time; Committee negatived.
	Then, Standing Order 47 having been dispensed with, Bill read a third time, and passed.

European Union (Information, etc.) Bill [HL]

Report received.

Welfare Reform Bill

Report received.
	Clause 1 [Employment and support allowance]:

Lord Skelmersdale: moved Amendment No. 1:
	Clause 1 , page 2, line 4, after second "his" insert "overall"

Lord Skelmersdale: My Lords, I shall speak also to Amendments Nos. 2, 4, 5, 7, 8, 12 and 13. All the amendments on today's Marshalled List are predicated on the fact that the Bill introduces a new, albeit replacement, social security benefit. Although the Ministers made a very good fist in Committee of explaining how the Government expect the employment and support allowance to work, I am afraid that there is still more to discover.
	This first group of amendments covers a point that was made crystal clear in Committee; that is, the same system of points used for incapacity benefit is to be used in the future. I am grateful to the Minister for arranging for some of us to see a presentation by the computer firm which is to design the program to make this happen. The customer will be asked a whole series of questions—they are called descriptors in the jargon—about his daily life and any physical and mental problems he has. On Second Reading, the Minister made a welcome announcement that the descriptors are to be added together to produce a final score which will inform the social security office whether the customer has a right to the benefit and, if so, at what level.
	We have had numerous debates on this issue in this House and another place, so I do not need to reiterate the arguments for this approach. I am sure that the Minister will say that these amendments are unnecessary; the Bill as it stands allows the accumulation of mental and physical limitations and the Government have given repeated assurances that the points from both mental and physical disabilities will be added together. However, those assurances have only been won by strong lobbying from outside lobby groups as well as opposition from all sides in both Houses. I would like to make sure that the Government do not suffer a change of heart on the principle at any point in the future.
	I have changed the drafting of these amendments significantly since Committee to make sure that they do not in any way prevent the Government doing what they want to do. I hope that the Minister will accept these amendments as confirmation that his assurances will indeed be acted on in the long term. I also trust that he will accept that it would be quite wrong for the Government to change their mind at some point in the future and decide that only one set of descriptors should be used to make this judgment—in other words, that there is never a case to be made that physical barriers cannot carry mental impediments with them. I beg to move.

Lord McKenzie of Luton: My Lords, these amendments and the arguments put forward by the noble Lord are very similar to those that we discussed in Committee, as he acknowledged. The noble Lord, Lord Skelmersdale, wants to ensure that we consider the effects of both physical and mental health conditions when deciding whether a customer is eligible for either employment and support allowance or access to the support group—the tests of limited capability for work and limited capability for work-related activity respectively.
	I will deal with limited capability for work first. Under Clause 8, customers are awarded points depending on the functional effects of physical and mental health conditions. They are determined as having limited capability for work where they score 15 points or more. The details of this are set out in the draft regulations under Clause 8, which were shared with noble Lords before Committee. As noble Lords will recall, and as the noble Lord, Lord Skelmersdale, acknowledged, I announced at Second Reading that we will allow points scores for mental health and physical descriptors to be added together in the Clause 8 assessment. This decision has been reflected in Regulation 3(3) of the draft Clause 8 regulations, which I published for noble Lords.
	The Clause 8 and 9 assessments assess very different concepts in very different ways. Limited capability for work-related activity cannot be based on the Clause 8 points scores, as there is no direct correlation between these scores and whether a person is likely to have limited capability for work-related activity—the purpose of the Clause 9 assessment. Instead, customers are determined as being eligible for the support group where they satisfy one of 46 functional descriptors found in the schedule to the draft regulations under Clause 9. Customers need to meet only one of the 46 descriptors to qualify for entitlement to the support group regardless of whether this relates to physical functioning or mental functioning. We will consider the effects of both physical and mental conditions when considering whether customers meet these functional descriptors. Hence, in carrying out both the assessments under Clauses 8 and 9, we will consider the effects of physical conditions and mental health conditions on a person's functional capability. That is the assurance the noble Lord is seeking.
	During Committee, I also explained that we do not need to make changes to the Bill to allow us to consider both physical and mental conditions in these assessments, as the use of "physical or mental condition" does not limit us to considering these conditions separately. In fact, changing the wording in the Bill to "physical and mental condition", as the noble Lord proposes in his amendment, could be interpreted as meaning that customers would have to have both a physical and mental health condition before they could be determined as having either limited capability for work or limited capability for work-related activity. That is clearly not appropriate and I am sure is not what he wants to happen.
	As I said, our draft regulations set out very clearly our intentions on this matter, and particularly that we will combine physical and mental health scores when determining whether a customer has limited capability for work.
	As noble Lords are aware, the revised PCA is based on the recommendations made by the technical working groups involved in its review, a copy of which was published last September. Following the initial limited evaluation carried out last October, a further and more detailed evaluation is about to start. This will be carried out by the technical working groups, which are independent of the department, but members of the PCA consultative group will also take part. A report of that phase 2 evaluation is due to be published in the summer and copies will be placed in the Library.
	I hope that that gives the noble Lord the assurance that he seeks about our intentions and the fact that there is a process of review under way—and, accordingly, that that will enable him to withdraw his amendment.

Lord Skelmersdale: My Lords, I am very grateful to the Minister for going rather further than he did in Committee in explaining this matter. It is clear to me at least that the Government of the day would have to come back to Parliament to change the regulation to achieve the use of a single descriptor at any one point. The Minister is looking at me very questioningly, however, so I shall give way.

Lord McKenzie of Luton: My Lords, it is true that if we wanted to change what we said in how the draft regulations are currently prepared we would need revised regulations. That is certainly the case.

Lord Skelmersdale: My Lords, that is exactly what I thought. I am also grateful for the confirmation that any one descriptor, either physical or mental, will be used to meet the criteria under Clause 8. I look forward to the evaluation of the technical groups that he mentioned when it appears on my horizon. The Minister has been most helpful and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 2 not moved.]

Baroness Thomas of Winchester: moved Amendment No. 3:
	After Clause 1 , insert the following new Clause—
	"Public involvement
	(1) This section applies where a person in receipt of employment and support allowance who is a service user is asked by a public, charitable or educational body concerned with health or social care to advise on service standards and delivery.
	(2) The Secretary of State may make regulations providing that—
	(a) a person who provides advice under subsection (1) shall be treated as having limited capability for work under section 8 in relation to the activities undertaken in pursuance of subsection (1) if he would otherwise be so treated; (b) in the case of contributory allowance or an income related allowance, any fee received in recognition of the service undertaken shall be subject to such disregard and averaging as may be prescribed; (c) in the case of contributory allowance or an income related allowance, reimbursed expenses shall be disregarded as income in such cases as may be prescribed; and (d) regulations made under section 16(3)(a) shall not apply in relation to advice undertaken in accordance with this section.
	(3) In this section "service user" means a person with current experience of using or requiring public services relating to their ill-health, disability or caring responsibilities."

Baroness Thomas of Winchester: My Lords, this is very similar to the amendment that I moved in Grand Committee. I seek to clarify the problem and set out what I believe is the solution. The Minister said in Committee that the amendment was unnecessary as the Bill contained relevant powers, but I was not reassured by his response. That is why I have tabled the amendment again.
	I shall first explain what "public involvement" is in connection with the Bill. It is involvement in the planning and delivery of public services by someone in receipt of disability benefits. That could be membership of a committee that monitors the quality of services or that seeks to develop good practice standards; it could mean participation in a focus group or research projects, social work training or staff recruitment panels; it could also mean participation in inspection teams and social care and health services by advising on what is important to people using those services.
	The amendment is important because involvement is a statutory requirement for all public bodies concerned with the delivery of social care and health services and must now include all people who use those services, which includes disabled people. There are, of course, disabled people who willingly take part in all those activities who are not on benefits; the problem that the amendment addresses does not lie with that group of people. The amendment is important because it tries to remedy real injustices uncovered in the sort of participation that I have described for those on benefits.
	Before going any further I must explain that the kind of public involvement that I spoke about is likely to be intermittent. Meetings of these bodies are nearly always occasional; if they are regular it might be for a few weeks or months, or even six months, but they are never as regular or often as, say, once a week for a year, so this involvement must never be confused with paid work. This is not "therapeutic work", which was the term used to describe work that people on incapacity benefits were allowed to do up to 2002; nor should it be muddled up with work-related activity under the Bill. Involvement might lead to work-related activity but, in itself, should be regarded as an entirely separate matter.
	The amendment puts forward four remedies. The first is that disabled service users are not ready to come off benefits just because of their public involvement. Job centres often believe that, if a disabled person agrees to public involvement, especially if the committee sounds rather grand, it means that they are no longer incapable of work. That misunderstands the whole reason that a person has been asked to participate, which is their ill health—which is often severe—or their disability. The amendment therefore makes it clear that a person who is so involved cannot have their benefits taken away simply because of this involvement. It puts them on the same footing as local authority councillors, who cannot be taken off incapacity benefit just because they are councillors.
	The second remedy is to allow a modest payment to be made to people on means-tested benefits—under the Bill, income-related ESA—within the amount allowed by the permitted work rules. Those on a contributory strand of ESA are allowed to be paid up to £86 in any one week, but the poorest people, those on means-tested ESA, can be paid only £5, £10 or £20 a week, depending on their circumstances, before their benefits are reduced. Under the amendment, payments received would be averaged over an appropriate period and the amount for those on means-tested benefits raised as prescribed in regulations. This would mean that the poorest people on benefits would not be excluded from offering their advice on public services.
	The third remedy is to reimburse expenses incurred by a disabled person attending meetings of a public body. Unbelievably, reimbursed expenses for travel to meetings for those on benefits are treated as earned income, and so are deducted from such a person's benefits unless that person has volunteered. Under the amendment, reimbursed travel expenses would be just that and could be accepted by those receiving a modest payment for involvement.
	The final remedy that the amendment seeks is to disapply the notional earnings rule for service users participating in meetings. At present, if service users volunteer to help by involving themselves in the ways described, they must tell Jobcentre Plus staff, who must ask them whether they could have been paid. If the answer is yes but they decided not to accept payment because they did not want any benefits deducted, this amount is deducted anyway from their benefits. I shall repeat that because it is so outrageous: an amount that the person in question has not received is deducted from their benefits as though it had been received. That extraordinary state of affairs is called the notional earnings rule. The amendment would disapply it for such a group of volunteers.
	As was pointed out in Committee, local authority councillors do not have to worry about whether they will be allowed to keep their benefits, as they are specifically singled out for special treatment under the Bill, as is the case now. Council work is treated as exempt and may not be used to assess capacity for work. What is more, reimbursed travel expenses for the journey from a councillor's home to the place of their duties are ignored. Why should those who participate in advising public bodies be treated differently? One of my correspondents wrote:
	"It is a classic case of no joined up thinking in government. They want more disabled people in public service but won't consider the benefits implications".
	It is difficult to estimate how many people we are talking about, but it could be around 10,000. This is of course a tiny percentage of the 2.7 million people who currently claim incapacity-based benefits.
	Will this be a cost to the public purse? No, it will not, because, in practice, people decline involvement rather than risk having their benefit continuity disrupted. The current rules mean that every other person on the public body is likely to be able to receive modest payment for their participation, but that a disabled person on means-tested benefits is barred for the reasons that I have given. I have not wearied the House with illustrations from the files of the Disability Rights Commission, but I have many with me which show that this is a growing problem. The amendment is modest, but it is important, and I urge the Minister to consider it sympathetically. I beg to move.

Baroness Meacher: My Lords, I support the broad thrust of the amendment. My perspective is that of a chairman of a mental health trust. As such, I am regularly involved in committees, where we make every effort to involve service users. However, it is incredibly difficult to persuade service users to become involved in our work. As I understand it, one key issue making it so difficult is the consequence of small payments on people's benefits. Most of our service users receive income support and a disability premium. Most have never been well enough for long enough to qualify for the contributory incapacity benefit; therefore, they are subject to a very tight earnings disregard—precisely £5 per week in many cases. As a result, their benefits are affected if they attend more than one meeting a week.
	That terrifies people. Any change of circumstance can cause all sorts of problems, with which I know the Minister is familiar. Our people simply cannot cope with all that uncertainty and fear; therefore, they keep their involvement down to a level where their benefits will not be affected, and that, as you might imagine, is minimal. Please excuse my throat; I am losing my voice.
	As the noble Baroness, Lady Thomas, argued, some way needs to be found to disregard those small earnings of people with severe and enduring mental health problems, for whom building up the capacity to take a job is a complex and often slow process. I am not suggesting a general increase in earnings disregards, as I realise that that would be extremely costly. I understand the implications of that. I appreciate that what is right for this group might then be demanded for others. However, I think that some special arrangements would be reasonable for those with enduring and severe mental health problems—and perhaps for one or two other small groups with particularly difficult problems and fluctuating symptoms—who are so difficult to reintegrate into work.
	Another development might be directly affected by this amendment, and it would be very sad if it were. We plan to develop a team of service users to operate our foundation trust membership office. We thought we would need four full-time people, all of whom would be service users, but we want to take on six, eight or even more, depending on the degree of their disability. The aim is that they will work part time for as many hours as they can manage but that the required number of people will be available each day to cover the work. We hope that, over time, people could increase their hours gradually, ultimately getting back into employment. The team would provide ongoing opportunities to gain work experience. If it worked, it could be repeated across the trust and, no doubt, across the country. We have a capacity to try to assist the Government's welfare reform agenda in preparing people with severe and enduring mental health problems for work.
	At the beginning, we can perfectly reasonably pay the permitted earnings and no more. I think we can argue that. However, over time, as people began to build up their capacity to contribute more fully, it would be incredibly unfair to pay just that tiny amount. If their benefits are adjusted to take account of small increments in income—and, in many cases, on a very irregular basis, as the noble Baroness, Lady Thomas, said, together with all the uncertainties that that entails—our job preparation project and, no doubt, many others like it simply will not happen.
	I have to confess that it is hard to imagine the benefit system coping with such initiatives in a constructive and flexible way. However, could the Minister's department consider an approach to severe and enduring mental illnesses and explore whether some method can be found to enable us to overcome the difficulties that we see? If flexibility could be achieved for the most disadvantaged groups, more severely mentally ill people could find their way back into a normal life.
	As I have suggested, a similar approach might be available to other very small, particularly disadvantaged groups. It is of the utmost importance that, regardless of what is done about benefit disregards, service users in our membership office group and others like it who undertake small pieces of work must not be deemed capable of work and expected to apply for jobs before they are capable of managing.
	The fact that someone can work 15 hours a week in a mental health trust as a service user does not mean that they are ready to take a job. Our trust and others like it will make all sorts of allowances by having extra staff to cover for late arrivals at work, underperformance or absences. If sanctions are applied in that situation, the ability of the mental health trust, as I have suggested, to contribute to the Government's welfare reform agenda would simply be destroyed. As a mental health trust our objective will be to place such service users in open employment just as soon as we feel that they can cope; in fact, we take them on ourselves as members of staff. It will be important for the DWP and trusts to work together to ensure that the entire project and others like it are not torpedoed by the use of blunt benefits instruments. The question for the Minister is therefore whether the legislation can be sufficiently flexible to allow sensible decisions on the ground. I look forward to hearing his response to this important amendment.

Baroness Howe of Idlicote: My Lords, I support the amendment, because, having read all the information from the Disability Rights Commission, I think this is an extraordinary situation. If I am wrong, I will be pleased to hear from the Minister. First, the very sensible passage of a previous Act that compelled such bodies to consult users was an excellent thought. It also reflects the human rights legislation in a number of ways, so that individuals, whether children or patients, have a right to have their views considered. Now we have a situation where those providing services actually want to involve users, whether in research, focus groups or recruitment sessions. It is a bit odd that there seems to be a difference between how local councillors are treated and how members of this group are treated. I am concerned that the very poorest users, those on means-tested benefit, are likely to suffer the worst deprivation and therefore their voices should be heard. They are disadvantaged far more than anyone else.
	If the Minister was applying the councillor test in all these areas, where would there be a difference? Is there a difference in the way that some of these groups are treated? If so, why? Can it really be justified? It would be important for the debate to hear the Minister's answer on that point.

Lord Skelmersdale: My Lords, I was not going to intervene in this debate, but two things occur to me, having heard the discussions between the noble Baronesses. The duty to consult disabled people and users of a particular service is quite different from employing them, either for cash or for free. Secondly, the Minister could perhaps use this opportunity to explain what he thinks is involved in work-related activity. I agree with the point made by the noble Baroness, Lady Meacher, that unpaid work—employment is the wrong word because it carries with it the idea of payment—for the service bodies might well lead to full-time employment. That could therefore come under the heading of work-related activity. It would be extremely helpful if the Minister could respond to that point.

Baroness Hollis of Heigham: My Lords, like other noble Lords, I very much hope that my noble friend will be able to support the amendment or that, if he cannot do so in its present shape, he can see how far he can meet these concerns by Third Reading. I hope that he can do that for three reasons. First, as services need to be reviewed and assessed continually by the users, we must engage users of services—they own them and they can shape them, with the result that the services would be improved. We have surely learnt that over the past 20 years in all our public service activity.
	Secondly, when a service user is engaged in reviewing services, he should not be out of pocket. A well established social security rule is that, if you can be paid, you are deemed to have been paid whether you have accepted payment or not. I understand the complexities associated with that; without it, we would have manipulation between income and capital, between capital and income and so on. None the less, there is a perfectly good read-across to local authority work in relation to this and no one should be out of pocket. Ideally, people should have modest recompense for their time and their activity.
	Thirdly—this is absolutely right—one of the problems, which we know from people on disability benefit, is that their world becomes smaller. They lose the knowledge network of jobs and of capacities for entering the world of work, and they lose the confidence to enter the world of work. Although it may take one year, three years or 10 years before someone is ready to return to remunerated work, with tax credits and so on, this proposal is a useful step.
	We have made these moves with volunteering; we have already established in previous legislation that, if someone volunteers for something, that will not mean that they are regarded as ready for work. We have established those rules for local authorities, too. There are plenty of precedents, so I hope that we will do the same in this case. Other people have rightly said that ultimately we should recast the whole of the earnings disregard rules. No cost is established on this; no benefits will be "less paid" than they would be otherwise. In practice, people will not expose themselves to a loss of benefit. This is a nil-cost amendment.
	If my noble friend feels that he cannot go all the way—I would understand that on the earnings disregard—at least the rule should be extended to non-departmental public bodies, where we want the input of service users across the board, not just for mental health trusts and the like, but also for other public bodies and public quangos, where we want to expand the world of disabled people, lone parents and so on and get the quality and value of their experience. I very much hope that, if my noble friend cannot go all the way with the amendment, he will take it away with the understanding that he will seek to make movement towards the spirit that I am sure the entire House shares.

Lord Oakeshott of Seagrove Bay: My Lords, that was a very positive and perceptive intervention by the former Minister, the noble Baroness, Lady Hollis. I was particularly struck by her comment that this is a nil-cost amendment. Whether there is a cost will be very significant in relation to whether Members from many Benches will support it. I specifically ask the Minister to address that point. In practice, does he believe that there will be costs in accepting it? In theory there might be, but we on these Benches believe that, in practice, it is a nil-cost amendment.

Lord McKenzie of Luton: My Lords, I thank the noble Baroness, Lady Thomas, for raising this matter and giving us a chance to debate again an extremely important issue. It gives me an opportunity to make an announcement that will go some way towards addressing the concerns raised by noble Lords.
	The amendment provides a new power to disregard payments received and to ensure that activity undertaken as part of the service-user involvement would not be taken into account in calculating benefit entitlement or payments. The Government recognise the importance and value of encouraging participation in public life and in learning new skills, gaining experience and building confidence. Service-user involvement involves many of the skills and activities in which people routinely engage in everyday employment. Indeed, that could count as part of a person's work-related activity when a requirement is introduced in time.
	The noble Lord, Lord Skelmersdale, asked me to define "work-related activity". I refer him to Clause 12(7) of the Bill, where it is defined in a wide manner:
	"In this Part, 'work-related activity', in relation to a person, means activity which makes it more likely that the person will obtain or remain in work or be able to do so".
	That point has been touched on by a number of speakers. I was interested in what the noble Baroness, Lady Meacher, said about using the foundation trust as an opportunity for people to job-share, to help them to gain confidence and to get closer to employment.
	We are aware of the concerns that have been raised about how current benefit rules can make it difficult to ensure service-user involvement. However, we believe that, in relation to receiving benefits to participate in such activity, the benefit rules provide a fair balance between encouraging participation and creating the correct work incentives, while also protecting the public purse.
	It is important to remember that encouraging people to work, build skills and increase their confidence is the foundation on which ESA is built. Our goal is to help as many people as possible to leave benefit dependency and to support themselves through work, with all the advantages that that brings. As part of this process, we recognise that part-time work can be important to well-being and to developing self-worth, and that it can act as a stepping stone to sustained work off benefits. That is why we have the permitted work rules in incapacity benefit. We think that they serve an important purpose, so we plan to bring them forward to ESA customers. These rules aim to act as a valuable gateway into the world of work and give claimants the opportunity to explore what kind of work is right for them. Moreover, the permitted work rules are generous and, combined with the voluntary work rules, provide customers with a wide range of opportunities to try out work for themselves.
	We have been looking for more flexible ways of helping people to take up opportunities and to increase their options without fear of their benefits being removed straightaway. One of the advantages of introducing a new, unified benefit is that it provides the opportunity to peel back the complex layers and rebuild, making improvements where we can. We have looked in particular at how the permitted work higher limit, which generally applies only to the contributory benefit, could help more people to try out work. As a result, I can announce today that, within ESA, we will be aligning the existing permitted work higher earnings limit between the contributory and income-related elements of the benefit. This will be a significant step in addressing the issues raised. Anyone claiming ESA will be able to earn up to £86 per week for up to 52 weeks, without it affecting their benefit entitlement. This is an important change, which will provide many more people with the opportunity to realise their aspirations. I am sure that noble Lords will join me in welcoming the change.
	To illustrate the overall impact of the change and how it will be of benefit to many more people, your Lordships may find it helpful if I provide an example. A customer who is receiving income-related ESA would be able to carry out permitted work for up to 16 hours and earn up to £86 per week for up to 52 weeks—that is, at existing rates. Currently, a man in similar circumstances on income support would have his benefit removed pound for pound for anything over £20 that he earns. That is a substantial change. At week 40, let us say, the customer's self-esteem and health are such that he feels able to move into sustained full-time work, safe in the knowledge that he will be protected by the generous linking rules and supported not only by his regular wage but by the tax credits system and the return-to-work credit, which provides a generous £40 per week of additional support for 52 weeks if earnings are below £15,000.
	We want to encourage participation in public life and it is right that people should be given the opportunity to help themselves whenever they can. That is why we have recently changed the guidance on applying the incapacity-for-work test to emphasise that, when people take part in service-user involvement, they should not automatically be sent for a reassessment. A reassessment should be done only where there are specific reasons for believing that the work that a customer is doing demonstrates that they no longer satisfy the conditions of entitlement to the benefit. We intend that similar guidance will apply to ESA in future.
	We also believe that people should not be allowed to keep all their benefits while undertaking work or receiving remuneration for other activities, such as paid service-user involvement. That is subject to the rules that I have just outlined. There is an important balance to be struck between income from working in and representing the community, and avoiding duplicate provision from the public purse.
	A number of specific points were raised. The noble Baroness, Lady Thomas, referred to service-user activities not being paid work. We do not agree that that is a helpful distinction. Service-user involvement involves many of the skills and activities in which people routinely engage in their everyday employment. In creating any distinction, we would be dismissing the value of service-user engagement in helping disabled people to feel confidence and to develop skills that will help them to find other types of work. As such, service-user involvement could count as part of a person's work-related activity.

Baroness Hollis of Heigham: My Lords, could the Minister help me on this? He spoke very carefully; I listened to the syntax. What he said is very welcome indeed and very sensible; I am sure that we all congratulate the Government on that. But he said that that involvement "could" count as work-related activity. What people, if any, might not qualify for the £80 or so a week disregard that will otherwise be on the new employment and support allowance? Who would not come within the scope of the change?

Lord McKenzie of Luton: My Lords, I believe that everybody who is on employment and support allowance will be within the scope of that change, whether they are on the income-related strand or the contributory strand; that is the key. My references to work-related activity involved other components. At the moment, the Bill does not provide for mandatory work-related activity, but there are powers in it when resources—

Baroness Hollis of Heigham: My Lords, is my noble friend confirming that no staff member in a local benefit office could decide that such an activity was not part of work-related activity and therefore did not come within the earnings disregard, and that therefore the person would not be a beneficiary of the change in policy? Is he saying that that could not happen?

Lord McKenzie of Luton: No, my Lords. With respect, we are dealing with two separate things: one is permitted work rules and their parameters, and the other is whether or not the activity as a service user—whether it is described as paid work or not is not helpful to our discussion—could count as work-related activity when you reach the stage when work-related activity is something that people who are not in the support group would be required to participate in. My point is that service-user involvement could well qualify as work-related activity, which would be relevant in due course when that component of the Bill comes in. It has many of the features that help people to move towards the job market. I hope that that clarifies the position for my noble friend.

Baroness Howe of Idlicote: My Lords, could the Minister help me? I wonder whether there would be a difference between the two groups if we applied what I call my local authority councillor test.

Lord McKenzie of Luton: Yes, my Lords. The local authority councillor test is different because the permitted work rules as they currently operate, and will continue to operate on an expanded basis, state that once you have breached the rules you are out of benefit. The local authority councillor rule will say that, once you have breached the threshold, that is deducted from your benefits. The Government are not proposing to extend those provisions relating to local councillors. I revert to our discussion about work-related activity. I stress that this would need to be judged on a case-by-case basis.
	I shall comment briefly on service users who offer involvement on a voluntary basis having notional earnings attributed to them. My noble friend Lady Hollis touched on them. The notional earnings rules are an important safeguard that help to protect the benefits system from abuse. Customers are already able to undertake a wide range of activity, such as permitted or voluntary work, without their benefit being affected. As I said, we intend to build on that foundation in the ESA. We are looking at ways of modernising the rules to enable customers to make the most of their talents. For example, we have recently clarified the rules on the treatment of lunches provided to volunteers to ensure that they can continue to volunteer and receive benefit in the normal way.
	On the references to rules on expenses, our key aim is to encourage people as much as possible to support themselves through work. We are always concerned about anything that discourages people from taking part in activity, and we will continue to look at how to make the rules more effective. Aligning the permitted work higher earnings limit will play an important part in enabling us to do just that. All changes that we make need to be underpinned by an understanding of the wider effects on earnings rules and work incentives.
	The noble Lord, Lord Oakeshott, asked me about the cost of the amendment. We would have to look at its consequences and weigh everything up, particularly the impact on work incentives. But I hope that what we have announced today on the permitted work rules will satisfy noble Lords that we have taken a significant step forward.

Lord Oakeshott of Seagrove Bay: My Lords, as the noble Lord is telling us that he is making a significant change, what is the additional cost of the change that he has just announced compared with what he was going to do?

Lord McKenzie of Luton: My Lords, I thought that the noble Lord would ask me that when I spoke earlier. Perhaps I may write to him with a figure. Again, I reassure noble Lords that we will continue to look for more flexible ways of helping people to take up beneficial opportunities without fear of their benefits being removed. Accordingly, I urge the noble Baroness to withdraw the amendment, and I can now announce that no cost is attached.

Lord Skelmersdale: My Lords, before the noble Lord sits down, although aligning the earnings rules within the limit for the two streams of ESA is welcome, does this not blow a hole in Schedule 1? What else is there to distinguish between the contributory allowance and the income-related allowance?

Lord McKenzie of Luton: My Lords, quite a lot. The cap on the earnings-related component is driven by the various allowances that come from applying the system. If you had a contributory allowance and other income, that other income would not change the overall level of the employment and support allowance. So there are two strands to what is a single benefit, and the difference between those two strands is not just the permitted work rules.

Baroness Thomas of Winchester: My Lords, I have had to cross out the word "disappointed" in my reply. I thank all noble Lords who have spoken in this short debate. I am extremely pleased with the Minister's announcement because, the more I and other people looked at the new system, the more it seemed that it was very unfair on those on means-tested benefits. I came across some research carried out by the Minister's department that found that people who earned up to £86 a week under permitted work rules moved from benefits into work in greater numbers than those on means-tested benefits, so the system may have that very good outcome.
	Did I hear the Minister say that jobcentres should never say to service users that being involved with the kind of committee that I was talking about means that they should no longer be on benefits? I think that he said that, just as people can be councillors and be on benefits, they can also be service users and still be on benefits—that is, that being involved in public life should not mean that people are automatically told that they are no longer incapable of work. Am I right?

Lord McKenzie of Luton: My Lords, perhaps it would be helpful if I restated precisely what I said so that there is no confusion. I said that we recently changed guidance on applying the incapacity-for-work test to emphasise that, when people take part in service-user involvement, they should not automatically be sent for a reassessment. A reassessment should be done only where there are specific reasons for believing that the work that a customer is doing demonstrates that he no longer satisfies the conditions of entitlement to the benefit.

Baroness Thomas of Winchester: My Lords, once again I thank the Minister for clarifying that point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 2 [Amount of contributory allowance]:
	[Amendments Nos. 4 and 5 not moved.]

Lord Skelmersdale: moved Amendment No. 6:
	Clause 2 , page 3, line 4, at end insert ", or
	( ) he is undergoing or recovering from treatment for a serious or life-threatening illness or is terminally ill as prescribed through regulations."

Lord Skelmersdale: My Lords, this amendment has been discussed in the House before and I am retabling it to follow up on a point which I do not believe the Minister has as yet sufficiently addressed. In Committee, he said that,
	"we have made provision for a limited group of people, including those who are terminally ill and people undergoing parenteral chemotherapy for cancer, to be treated as having limited capacity for work-related activity".—[Official Report, 20/2/07; col. GC 35.]
	However, the question I had asked previously was whether the Government had any intention of ever expanding those two categories to include other cancer patients taking different courses of treatment, or any other people undergoing treatment of an equivalent severity. I hope that the Minister can answer that now.
	There is no evidence that oral chemotherapy has less debilitating side effects than intravenous treatment. I checked that with a Member of your Lordships' House from the medical profession who advised me:
	"There is no evidence that oral chemotherapy is less punishing than intravenous and indeed there is some evidence about to be published that some regimes can be easier, but they are not available outside trials as yet in bowel cancer".
	Macmillan Cancer Support, in particular, is very concerned that the draft guidance that we have seen makes no mention of the limitations that cancer treatment can impose on patients, especially when appearing for work-focused interviews, which will be compulsory for many cancer patients. If the Minister cannot give us reassurances on moving all cancer patients into the support group, can he at least confirm that regulations will include guidance that assessments, interviews and activities that are subject to conditionality can be postponed for reasons relating to the claimant's treatment or condition? Currently, it appears that claimants cannot postpone a work-focused assessment unless they can show it would not be helpful or appropriate. Can the noble Lord confirm that this covers the claimant who is feeling too unwell or fatigued to appear for interview?
	We do not live on the Continent, where you are presumed guilty until you have proved your innocence. In this country you are presumed innocent until you are proved guilty. Does the Minister not therefore feel that the guidance should make specific allowance for claimants to postpone an interview rather than having to go through the rigmarole of being threatened with sanctions and essentially having to prove their innocence?
	Guidance on all the other aspects of ESA assessment and expectations are similarly silent on the subject of what cancer patients can be limited by. For example, fatigue and low immunity are common side effects, but they are not mentioned anywhere as a consideration on whether a claimant is capable of undertaking work-related activity. Does the Minister expect most cancer patients to be moved into the support group by the current assessment? If not, can he confirm that guidance will ensure that personal advisers will be fully aware of how debilitating cancer treatment can be? I beg to move.

Lord Addington: My Lords, I shall briefly come in behind this amendment. The most important part is not so much that cancer groups are themselves the main claimants, but the flexibility on new groups coming in and how we expand from here. Can the Minister give us an idea about what is going on, because if a new group, new type of treatment or new awareness comes in, it would make me feel slightly easier about the whole process? If you get it wrong, the whole thing will break down and those who are most vulnerable will suffer. It is that group and the degree of flexibility that concerns me, and I would like some information about the process.

Lord McKenzie of Luton: My Lords, the amendment is intended to allow people suffering from the most serious conditions and the terminally ill to automatically enter the support group. While I entirely understand the well intentioned motives of the amendment, it undermines a key principle of the new benefit and would help to maintain the concept of incapacity for work, which we are trying to remove. Our reforms are about trying to ensure that as many people as possible have the chance to engage in work. As such, the support group criteria set out in the schedule to the draft regulations for Clause 9 have been drafted to ensure that only people with the most severe levels of functional limitation arising from disabling conditions, which prove that they demonstrate limited capability for work-related activity, will be placed in the support group. The criteria are not based on specific health conditions or disabilities but instead focus on the impact that an individual's health condition or disability has on his ability to function. We strongly believe this is the fairest way of carrying out such an assessment, as different individuals can be affected by conditions in very different ways. We think it only right that we look at each person as an individual, assessing what he can and cannot do and what it is therefore reasonable to expect of him.
	We have, of course, accepted that there are a small number of situations where we need to treat people as having limited capability for work-related activity even though they might not satisfy the descriptors we intend to use to test for it. As such, we have made special provision in our draft regulations for people who are terminally ill, as we do not believe it is reasonable to require a person in the last few months of his life to have to engage in work-related activity in order to receive ESA. We have made provision for people who are receiving the most debilitating forms of cancer therapy. This is because we are confident that they will all experience severe functional limitation during the course of treatment and for a period after it has ended, to the extent that it would be unreasonable to require them to engage in work-related activity—I am not sure whether the noble Lord, Lord Skelmersdale, was suggesting that that judgment might not be right and that we should not put even that group of people into the support group.
	This does not mean that people receiving other forms of treatment will not be given access to the support group. We know that many other forms of treatment, including many other treatments for cancer, can be debilitating for many customers, but they will not be for everyone, which is the fundamental point. That is why, when considering whether someone has limited capability for work-related activity, we want to consider his individual circumstances and the way that his treatment affects his functional ability. Where people suffer from severe functional limitations, they are likely to satisfy one of the 46 support group descriptors and already demonstrate limited capability for work-related activity so that they are placed in the support group. Let us take the example of cancer patients suffering from severe fatigue as a side effect of their treatment. They are highly likely to meet one of the 46 descriptors that we will use to determine limited capability for work-related activity and will therefore be placed in the support group, but we will consider that on a case-by-case basis.
	Meanwhile, draft Regulation 3(2)(c) makes provision to treat people as having limited capability for work-related activity if engaging in such activity would pose a substantial risk to their physical or mental health, even if they do not meet any of the descriptors. As an example, perhaps I can look once more at cancer patients. Many people undergoing cancer treatments can have a significant risk of infection because their immune system can be compromised by their treatments. I know that Macmillan Cancer Support is concerned that asking such people to engage in work-related activity could be seriously damaging to their health. Anybody who is at such serious risk of infection, whatever the cause, will be treated under these provisions as having limited capability for work-related activity and will be placed in the support group. This is again something that we want to consider on the basis of individual circumstances.

Lord Forsyth of Drumlean: My Lords, can the Minister give an indication of his department's estimate of the number of people who are suffering from cancer and having treatment who would not go into the support group? What percentage is likely to be outwith the support group?

Lord McKenzie of Luton: My Lords, I do not believe that we can estimate that with precision. While we know the number of customers currently on IB who are suffering from cancer, I do not think we know the range of challenges that those individuals face and therefore cannot estimate it. If I am wrong on that, I will revert to the noble Lord.

Lord Forsyth of Drumlean: My Lords, I am most grateful to the Minister, but I find it difficult to see how he can assess whether there is merit in the amendment of my noble friend without knowing that information. If the vast majority would fit into the support group, then there is clearly nothing to argue about. If it is a significant number, then it would undermine his general policy and I have some sympathy with that.

Lord McKenzie of Luton: My Lords, the thrust of the principle involved here is that we should look at individual cases to see how people's medical condition impacts on their individual ability to function in a range of circumstances. The principle, in a sense, is that whether it was one, 10,000 or 20,000, we would want to look at people's individual circumstances and not move them en bloc into the support group. I have outlined some exceptions to that, relating to people who are terminally ill or going through certain forms of cancer treatment, but we generally want to look at the support and circumstances of individuals and to make the judgment on that basis. That is a key part of our approach. Therefore, whether it was one, 50 or 10,000, it would not affect the answer that I would offer to the noble Lord, Lord Skelmersdale. I reiterate that anybody at serious risk of infection, whatever the cause, will be treated under these provisions as having limited capability for work-related activity and placed in the support group.
	I want to comment here on those people whose condition or treatment does not affect them to the extent that they are eligible for entry to the support group. We believe, in principle, that it is right to require these customers to engage with us. However, we accept that there needs to be flexibility to deal with people's individual circumstances, and that some of these people may still have periods where they are seriously affected either by their condition or treatment. That is why personal advisers can defer interviews—the draft regulations set out that work-focused interviews can be deferred where they would not assist the customer or be appropriate in the circumstances. This may well be the case where someone is undertaking treatment for cancer, especially where there are side effects such as significant tiredness. Furthermore, the effects of health conditions or treatments, such as periods of severe fatigue, can be taken into account when considering good cause for customers not complying with requirements.
	I hope that I have answered the point raised by the noble Lord, Lord Addington, within that. We are looking not at groups of people but at individual circumstances; indeed, if new treatments came along that improved people's ability to function with given medical conditions, they might give rise to judgments by people undertaking the medical assessment that were different from those today without them. I hope that the answer has been reassuring and that the noble Lord will therefore feel able to withdraw his amendment.

Lord Skelmersdale: My Lords, it most certainly was not my intention to intervene or interfere with the underlying principle of the Bill, which as I have said on numerous occasions I agree with as far as policy goes. However, from all the amendments there are clearly matters of detail about which I am, shall we say, suspicious.
	One thing I do not want is to undermine the key principle of the Bill—that only the most severely disabled and those in their last few months of life should go into the support group. For the others, the ability to function—perhaps for the next few weeks or months—is what matters. Earlier in our proceedings, I got the comfort that I wanted from the Minister; namely, that if they were unable to function for whatever reason—chemotherapy or anything else—they would not be expected to undertake work-related activity. I am most comforted by what the Minister has just said. I doubt that I will have to come back to this matter at the next stage of the Bill but I am afraid that, if on reflection I decide that I ought to, I will. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 8 [Limited capability for work]:
	[Amendments Nos. 7 and 8 not moved.]

Baroness Greengross: moved Amendment No. 9:
	Page 6, line 18, leave out from "to" to end of line 20 and insert "such matters as the regulations may provide"

Baroness Greengross: My Lords, I shall also speak to the other amendments in the group up to Amendment No. 35. The amendments would not necessarily result in any changes to the current draft regulations or implementation of these welfare reforms; they would simply make provision to widen the scope of the assessment process in the future. An assessment of an individual's physical, mental and sensory functionality does not equate to an assessment of that individual's capability for work or for work-related activity. Some factors that relate to an individual's impairment will have an impact on their capability for work, and obviously this must not be neglected. However, the medical factors related to their impairment are not the sum.
	The amendments are very much supported by RADAR. They would move the Bill closer to the now widely accepted social model of disability and widen its scope to reflect future advances in our understanding of what "capability for work" really means. They would allow future assessments to take account of the vast array of factors that may limit a disabled individual's capability for work. Those factors could include education, training and skills, the availability of funding for reasonable adjustments, access to the workplace, discrimination, the effect of living in an area of high unemployment and the ability to access assistive technologies and their associated training and maintenance. Similar amendments were rejected in the other place solely for technical reasons. Those reasons have now been addressed, and I can see no reason why there should not be cross-party support for the amendments as there was in the other place.
	It is critical that we agree the text of the Bill to ensure flexibility in the regulations to follow. With the current terminology, regulations will always maintain a focus on impairment rather than incorporate barriers faced by a disabled individual that are beyond their control. It could be argued that the work-focused health-related assessment should not incorporate an awareness of these wider societal barriers, and that that should be done by the personal adviser in the work-related activity stages. I would argue that the personal adviser should be involved at this first stage, which represents the beginning of an individual moving towards the labour market. Indeed, as the noble Baroness, Lady Morgan, informed us in Grand Committee, the work-focused health-related assessment will advise the personal adviser looking after the customer on the kind of health-related interventions that would benefit the customer, such as a condition-management programme.
	The narrow impairment focus wrongly emphasises the start of work-related activity. It could even alienate disabled people from making the most of the process. In the other place, it was noted that the work-focused health-related assessment and the medical examination process will not only look at medical issues but will have a specific and detailed approach and will examine more than just the medical barriers faced by people with disabilities who want to re-enter the labour market. This will be enabled by removing the terminology "health-related" and by not limiting any part of the assessment to healthcare professionals. The regulation must move us beyond narrow understandings of disability. We must not categorise individuals only by their impairment or medical conditions. I beg to move.

Baroness Thomas of Winchester: My Lords, we agree entirely with the noble Baroness, Lady Greengross, in her attempt to move towards the social model of disability. I shall speak to Amendment No. 33 in particular but I will not repeat all that the noble Baroness said. We seek flexibility in the regulations so that the kind of barriers she mentioned will be taken into account as being beyond the control of the claimant. They are just as likely to affect a person's capability for work as the kind of health-related interventions that the Minister spoke about in Grand Committee. As the noble Baroness also said, the narrow impairment focus emphasises wrongly the start of work-related activity and may alienate disabled people from making the most of the process. No one wants to be categorised as just "disabled", particularly if their confidence for work needs to be bolstered, otherwise this is how they will think of themselves. This new Bill gives us the chance to change the climate.

Lord Skelmersdale: My Lords, I am sympathetic to these amendments, although jobseeker's allowance will continue alongside this Bill. I have spoken before about how pleased I am that the Bill sets into law assessments designed to determine what a disabled person can do rather than what he or she cannot do. This adjustment takes into account not only the contribution that people who will receive ESA have to offer but also the benefits that will come to them from developing their skills and confidence and moving closer to work readiness.
	However, I cannot fully support these amendments. The employment and support allowance is and should be focused primarily on disabled people. These amendments would potentially open the field of claimants to anyone who is unable to find a job. For example, as I understand it, it would be possible for regulations to specify that someone who felt their education had not sufficiently prepared them for employment, or even someone who lived in an area with no suitable vacancies for them, as eligible for ESA. That is not the purpose of ESA. I look forward to hearing the Minister's response to both these amendments.

Lord McKenzie of Luton: My Lords, the noble Baroness's amendments all concern the social model of disability. These amendments and Amendment No. 33, proposed by the noble Baroness, Lady Thomas of Winchester, seek to ensure that the revised personal capability assessment focuses more widely than on health conditions and disabilities, the impact that these conditions have on customers' functional capability and health interventions that might help to raise that capability.
	Eligibility for employment and support allowance will depend on customers being determined as having limited capability for work. Equally, eligibility for the support component of the allowance will depend on customers being determined as having limited capability for work-related activity. Both limited capability for work and limited capability for work-related activity will be based on the impact of health conditions or disabilities on customers' functional capability. That is a fundamental concept; the allowance has been created for people currently unable to work because of a health condition or disability. Although customers could be disadvantaged by a range of other factors, such as a lack of skills, the local labour market or the attitudes of employers—points touched upon by the noble Lord, Lord Skelmersdale—these are not reasons for entitlement to the benefit.
	It is therefore appropriate that the regulations we use to determine limited capability for work are defined in the Bill by reference to a specific disease or bodily or mental disablement. That is the framework that we have at the moment, and we think that it remains appropriate for the revised PCA. Focusing on functional capability also helps to ensure that the assessments are applied consistently across the country. It is a key principle of the benefits system that eligibility should be defined nationally and consistently and should not be affected by local factors. Taking into account wider social factors would effectively result in different eligibility criteria applying in different areas. This could result in customers receiving different benefit entitlement decisions depending on where they live; that is clearly unacceptable. However, we will not be ignoring social factors. I will say more on this in a moment.
	The noble Baroness has proposed that we replace the term "medical examination" with "eligibility test". Again, we have used this wording for a very specific reason. The revised personal capability assessment will gather and evaluate information from a number of sources to assess whether an individual has limited capability for work or limited capability for work-related activity. As at present, we will request information from healthcare professionals and other relevant people, and customers who are not identified at this early stage as having limited capability for work-related activity will be asked to complete a self-assessment form to help us to assess their condition.
	For most customers, a part of this evidence-gathering process will be a face-to-face medical examination with a healthcare professional. The phrase "medical examination" in Clauses 8 and 9 refers to this very specific element of the PCA process. The decisions on whether a customer is eligible for either employment and support allowance or access to the support group are not taken during this medical examination, nor are these decisions taken by the healthcare professional carrying out the examination. The decisions are taken subsequently by a departmental decision-maker, who considers all the available evidence, including that gained from the medical examination. Replacing the phrase "medical examination" with "eligibility test" would not make it clear that these are references to very specific parts of the PCA process. Meanwhile, calling these examinations "eligibility tests" would not make it clear to our customers that a face-to-face examination would be involved.
	On the amendments concerning the work-focused health-related assessment, as part of our reforms we are adding a new stage to the personal capability assessment. This new stage, the work-focused health-related assessment, will be a positive experience that gives customers the opportunity to explore with a trained healthcare professional his or her perspective on their disabling condition. It will aim to identify as early as possible in a claim the health-related barriers that lie between customers and their engagement with work, as well as the health-related interventions that will help to improve their capability. There is good evidence about the beneficial effects on health of early intervention.
	Once more, we have very specifically used the term "health-related" in the title of this assessment, as we want the focus of the assessment to be on the health-related issues I have already mentioned. We use health in its broadest sense, indicating that the focus is on matters relating to an individual's body or mind and the impact of those on that individual's capability for work; as such, we include impact on the body or mind caused by health conditions and disabilities.
	We are using healthcare professionals to carry out this assessment because they have specific skills that we would not expect a personal adviser to have. For example, the assessment will identify whether any health-related interventions, such as cognitive behavioural therapy or physiotherapy, would help customers to improve their capability. It would be unrealistic to expect personal advisers or others to be able to identify these interventions as suitable for customers.
	Although we want the assessment to focus on health-related issues, I assure noble Lords that this does not mean that other barriers to work will not be taken into account. For example, the healthcare professional carrying out the assessment will be able to identify, in general terms, occupational factors that are creating a barrier to return to work, such as advising whether a customer has mobility problems making it difficult to access a workplace. But at this early stage, without a specific job in mind for the customer—or, where the customer does have a specific job, without an anticipated date for a return to work—it would not be appropriate to carry out a detailed workplace assessment. That would come at a later stage, when the customer is ready to move into work and it would be in the context of a specific job. The customer's personal adviser would then arrange the necessary workplace assessment.
	Meanwhile, the work-focused health-related assessment will allow customers to explore their own beliefs and perceptions about their disabling condition. We believe that this in itself will be beneficial to the customer, because we know that beliefs and perceptions can influence capability. People with a positive, coping attitude are more likely to be able to influence their level of capability than those who have perhaps lost confidence in their ability to cope.
	We will ask customers about the barriers that they perceive between themselves and the labour market. Although some of these barriers will be medical, it is likely that others will be societal. Again, we do not suggest that these non-medical barriers will be ignored. Information from the work-focused health-related assessment will be given to the personal adviser for use during the work-focused interviews, which will focus on wider issues such as societal factors. Although personal advisers are unlikely to have the skills needed to identify health-related interventions, they will be able to provide help to address wider issues such as transport problems, skills needs or low confidence.
	Much of the discussion in Committee was on the role of employers and the need for the Government to engage with them and help to ensure that they meet their obligations under the Disability Discrimination Act 1995 to support people with health problems and disabilities to stay in or return to work. I can assure noble Lords that we are taking this seriously, and a concerted effort is being made throughout Government with a particular focus on people with mental health problems, who can suffer a greater stigma than most. Although I would not deny that it is a big task, we are committed to it and are working together to tackle the problem.
	I know that noble Lords particularly want to raise awareness of the access to work scheme among employers, and I thank them for their support for the scheme. I assure the House that we actively promote the availability of access to work and all our disability employment services. Information is freely available on our website, at jobcentres and from our voluntary sector partners.
	I have explained at some length to the noble Baroness our intentions for the revised assessment and why we have used the wording we have. I also hope that I have reassured her that, although it would not be appropriate to base benefit entitlement on social factors or to deal with them directly in the work-focused health-related assessment, societal factors will be addressed. I hope, therefore, that the noble Baroness will be able to withdraw the amendment.

Baroness Greengross: My Lords, I thank the Minister for those reassurances. I am not certain why an eligibility test, if added to the conditions, should not be broad and should not incorporate certain standards at a national level. However, I accept those assurances and hope that he will ensure that the code of practice makes them very clear so that those issues are not ignored. I remind the Minister, although he does not need reminding, of the WHO definition of health, which is very broad and includes well-being and various other socially better-defined criteria. I will think again on the issue. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 10 and 11 not moved.]
	Clause 9 [Limited capability for work-related activity]:
	[Amendments Nos. 12 to 15 not moved.]

Lord Skelmersdale: moved Amendment No. 16:
	After Clause 9 , insert the following new Clause—
	"Report
	The Secretary of State shall lay before Parliament an independent report on the operation of the assessments under sections 8 and 9 annually for the first five years after these sections come into effect."

Lord Skelmersdale: My Lords, this amendment is an adjusted version of the one tabled by the noble Lord, Lord Oakeshott, in Committee. The arguments are much the same as I adverted to when I spoke for the need for more affirmative orders. In Committee, the Minister gave us some reassurances that the PCA would be fully evaluated as the pilot schemes were expanded and adjusted. We also had an assurance that there will be an evaluation two years after implementation, with the possibility of further evaluation after that. Further evaluation would be an excellent thing to happen and I hope that the Minister will be able to give us firmer promises on that today.
	There has been a lot of debate and criticism of the assessments as this Bill moved first through another place and then through your Lordships' House. A lot of that was due to confusion, which has mostly been cleared up now. It has been a particularly clear indication of how pilot schemes are not enough. They provide valuable information about the failings of a draft system and are essential to work through teething problems before they are rolled out. But they do not provide a guarantee that the final version will be successful.
	The new PCA is very different from the old eligibility test. In particular, the number of descriptors identifying physical disabilities that will be taken into account has been much reduced. There is a much wider appreciation of mental disabilities, which is good. It is unsurprising that such a large modification has caused concern among claimants and the organisations that represent them. Credible reviews that assess whether the new assessments are needed in successfully identifying claimants and putting them on to the correct components will do much to reassure these claimants and to identify any of the problems that many of them are foretelling. Similarly, there is much uncertainty about the computer system that is being used. I thank the Government and Atos Origin for giving us the opportunity to see it in action, but watching the demonstration of a program that was developed for incapacity benefit and has not yet been finalised for ESA is hardly the same as observing the latter in the field.
	We all hope that the new ESA and PCA will lay people's fears to rest as they are rolled out and given a chance to prove themselves. However, I hope that the Minister will be able to provide me with further reassurances that any future blips will be picked up and addressed by a thorough review process.
	As I said, this amendment states that the report should appear annually for the first five years after Clauses 8 and 9 come into effect. That should be long enough to have the new system fully up and running; if it is not working properly by then, we really will have to go back to the drawing board and it is quite possible that a new Act will be required. Even if it is not, a major reform of the regulations will be necessary. We ought to know in advance of that happening. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, having run the first lap of this amendment in Committee, I am happy to pass the baton to the noble Lord, Lord Skelmersdale, to move it here. We support him in that; perhaps he will return the compliment on Third Reading with another amendment. We shall see.
	As we said in Grand Committee, there was considerable cross-party support in another place for amendments along these lines. I made it clear in Committee and do so again today that we do not regard as satisfactory the assurances from the Minister about what is effectively an internal review. It seems a classic example of a controlled review of which Sir Humphrey in "Yes Minister" and "Yes, Prime Minister" would have been proud.
	The amendment is very reasonable—indeed, it is modest, as it gives the Government the opportunity to choose where the independent review comes from. I cannot see how the Government can possibly object, if they really support transparency and a proper process of post-legislative scrutiny by Parliament of what are, after all, major changes in legislation, which could affect many of the most vulnerable in our society. We are happy to support the amendment.

Lord McKenzie of Luton: My Lords, I recognise the concern underlying the amendment that the revised PCA descriptors and scores should be subject to independent evaluation following the implementation of the employment and support allowance.
	I repeat the undertaking given by the Minister for Employment and Welfare Reform in another place that there will be independent monitoring of the revised PCA descriptors and scores assessing limited capability for work. Moreover, I can today commit to ensuring that this covers the first five years of operation, rather than the two years to which we have already committed. I also confirm that reports of the independent monitoring will be placed in the Libraries and that as usual they will be subject to parliamentary scrutiny by means of Parliamentary Questions, Select Committees and so on.
	The Government are, of course, committed to evidence-based policy making and recognise the value of seeking information that will help to establish the effectiveness of policy initiatives and their implementation. As I said in Committee, a large amount of research and review is undertaken over a whole range of policy areas and those reports are routinely published. A working paper on performance in Pathways areas was published in January last year and, as of December 2006, we have produced Pathways statistics on a quarterly basis. Furthermore, we routinely publish externally commissioned research reports as soon as they are available. Ten such reports on Pathways have been completed to date.
	We are currently evaluating the impact of Pathways on both new and existing customers in the first seven areas. The focus will be on employment, benefit exits, earnings and health and we are also evaluating the impact of Pathways as it expands to cover more districts. As we progress with our evaluation over larger areas, there will be a greater opportunity to look at sub-groups. This will include further analysis of the impact of Pathways on customers with a mental health condition.
	In addition to the quantitative assessments, we are exploring attitudes and experiences of Pathways participants and key Jobcentre Plus and provider staff. This planned evaluation will continue until 2009. We are due also to evaluate the impact of provider-led Pathways.
	We need to maintain a balance between seeking information and monitoring that helps inform policy-making and ensuring that the information gathered is appropriate and represents a responsible use of resources. We would not, for instance, wish to be obliged to provide annual reports where it has been established that the revised PCA is effectively identifying those people who have limited capability for work.
	I hope that I have reassured noble Lords that there will be an effective process of evaluation, that we will extend it over five years, and that those reports will be in the public domain and available to Parliament through the normal means. I hope that noble Lords will see that as a better route forward than an obligation to produce annual reports at fixed points in time. I ask the noble Lord to withdraw the amendment on that basis.

Lord Skelmersdale: My Lords, I am grateful to the Minister. I was grateful to him when I heard of the original undertaking to carry out independent monitoring for the first two years. The Minister now announces that this is to cover the first five years. I rather wonder whether my amendment had anything to do with that. Whether it did or not, I am delighted that the results will be published and placed in the Library.
	The Minister announced a whole range of "assessments"—dare I call them that?—which were to be made of the process during that five years. The trouble is that the results will come out rather piecemeal. There will be no document which puts them together appropriately as they come out and there will be no single booklet that we can read. If we are particularly assiduous in looking at these things, we will know what has happened—what has gone right and what has gone wrong. We may even know what remedies are to be proposed. However, what we will not know, at least if I correctly understood what the Minister said, is how many people the ESA has been successful in getting into work, thereby achieving their and our ambition; and we will not know how the trend in applications for the benefit is going, because, clearly, over a period, even in the first five years, one would expect a considerable drop in the number of applications for the benefit. Indeed, we have already seen a drop in the past year for which we have had figures. Perhaps it is a flash in the pan—one does not know.
	Therefore, even though I accept at face value what the Minister said, his response is not satisfactory. I wish to press the amendment—

Lord McKenzie of Luton: My Lords, before the noble Lord sits down, perhaps I may press him on the matter. He said that his amendment calls for an independent report. I reassured him that there will be an independent report. He said that there would be no document which pooled together all our reports. Some of those reports are independent; some are internally produced for management purposes—they will be a mixture. To require that they be fed into one independent report would in the case of some require an additional layer of work and resource which I respectfully suggest to him is not necessary.
	The noble Lord asked how we will know whether the process is successful in getting people into work and said that we must have an annual report to determine it. Some people's journeys into work, and judging whether the process is successful, will not always be capable of being quantified and identified in a rigid annual cycle. That is why an independent review, to which the Government are committed, is a better way of addressing this matter than forcing a narrow annual report to be made. Particularly in the early period, such a report is unlikely to be able to judge with full effectiveness the journeys that some people are making into work, because they would not necessarily appear in employment statistics. I impress that on the noble Lord and ask him not to press his amendment.

Lord Oakeshott of Seagrove Bay: My Lords, before the noble Lord sits down again—I am not quite sure which noble Lord will sit down, but before either or both of them do—I would like to say that the business of a regular, annual report is exactly the point. It is not rigid, but a reasonable and regular period in which to report. Otherwise, I am afraid that the plethora of different reports, to which the Minister referred, will enable the Government to fix the time and the place. The report will not be properly independent and annual and it seems perfectly reasonable to ask for one which is independent, annual and fixed for the first five years.

Lord Skelmersdale: My Lords, the Minister obviously does not want to come back. I have already tried to beg to press the amendment once and I am going to do so again. This time, I hope it will be for the final time. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 16) shall be agreed to?
	Their Lordships divided: Contents, 150; Not-Contents, 133.

Resolved in the affirmative, and amendment agreed to accordingly.

Health: Modernising Medical Careers

Lord Hunt of Kings Heath: My Lords, with the leave of the House, I shall repeat a Statement made earlier today by my right honourable friend the Secretary of State for Health. The Statement is as follows:
	"In the Written Ministerial Statements of 7 and 13 March, I set out the Department of Health's plan for an immediate review of the first round of the new national recruitment and selection process for doctors in postgraduate training. As part of the Modernising Medical Careers—MMC—reforms of postgraduate medical training, new specialty training programmes will be introduced in August 2007. "To support implementation, a new national recruitment and selection process was introduced this year, facilitated by the online Medical Training Application Service—MTAS. That process sets out national recruitment and selection criteria, documentation and standards, replacing the countless local appointment processes that had previously been in place. The new arrangements were developed with the help of the medical royal colleges, trainee doctors and others. We will continue to work with them to ensure that trainee doctors are properly supported and fairly treated, and that the NHS is able to train and recruit the best doctors for the future."Doctors have been applying for their preferred specialty training programme since 22 January 2007 and interviews have already begun. A large number of posts will not be filled in the first round and we have stressed to those interviewing in round 1 that they should not consider appointing unless they are absolutely satisfied with the calibre of candidates. "It is clear that there have been concerns about the selection process, and that the process as a whole has created a high degree of insecurity among applicants and, indeed, more widely in the profession. We therefore commissioned an immediate review to establish what had gone well and what needed to be improved to create greater confidence in the process."The review is independent, being led by Professor Neil Douglas, vice-president of the Academy of Medical Royal Colleges and president of the Royal College of Physicians of Edinburgh. Members of the review group include representatives of the royal colleges, the British Medical Association, the four United Kingdom health departments and employers. "The review group has considered a wide range of evidence and listened carefully to the concerns of the profession and NHS employers. As a result, the review group has agreed immediate action, but will also continue its work throughout March. The review group decided that round 1 should continue, with a number of changes to strengthen implementation at every level. In particular, all eligible applicants for level 3 and 4 speciality training—ST—will be guaranteed an interview for their first or second choice of training post; that includes those who have so far been offered only their third or fourth choice. All applicants at ST1 who have not been shortlisted for any interviews will have their application reviewed and may be offered an interview in round 1. If not, they will be offered career guidance and support to enter round 2. All applicants for ST2 who have not been shortlisted for interview will be offered a face-to-face review with a trained medical adviser to determine whether they meet the shortlisting criteria. Those who meet the criteria may be offered an interview in round 1. Those who are not selected for interview will be offered career guidance and support to enter round 2."We expect over 5,000 more doctors to be interviewed in round 1 as a result of these changes. We will also publish on the MMC and MTAS websites details of competition ratios by specialty and entry level, to help applicants to consider their options for the second round, together with further advice and information for candidates. In addition, further significant changes will be made to the application form and the scoring system, to improve selection in the second round. The revised approach will be tested and agreed with the royal colleges, junior doctors, postgraduate deans and employers. I am grateful to Professor Douglas and his colleagues for their continuing work on the review group. We will publish the group's final report once it is completed".
	My Lords, that concludes the Statement.

Lord McColl of Dulwich: My Lords, I thank the Minister for repeating the Statement made by the Secretary of State in another place. Knowing what a charming Minister he is, I am sure he will avoid the mistakes of the Secretary of State in her answers to questions. She was asked six times if she would apologise for the shambles that we find ourselves in. Unfortunately, she would not. It was also unfortunate that she started blaming others for the shambles. It was a pity; all she needed to say was, "It is a shambles, we are sorry for the inconvenience and we are going to put it right". That would have been very acceptable.
	To be fair to the Government, MCC has been discussed for three years and the Government have taken notice of what people have been saying. For instance, they agreed with the Royal College of Physicians in its desire to have longer training before entering specialist training, like gastroenterology. The Government agreed that there could be another two years for securing membership of the Royal College of Physicians before entering further specialities. That was good.
	There is a very big problem in surgery. As noble Lords are probably aware, there are five or six SHO—senior house officer—posts for every training post in surgery. That is an unfair disadvantage, but it has been so for a long time. Those who were not successful in securing a post could stay in the SHO post until a vacancy occurred. The problem with the arrangement that we have got is that it is like a big bang; it has come in too quickly, whereas the Calman system was phased in gradually—that would have been much better.
	As was mentioned in another place, one of the problems has been the scoring arrangements. For instance, if you had a PhD, you got one point. On the other hand, if you wrote a good essay on "How I Deal with Stress", you got four points. If you produced a poster at a meeting, that would be three points. It takes about an hour to prepare a poster for a meeting; it takes three years to get a PhD and you have a very tough exam at the end of it. There is something radically wrong. Not having the curriculum vitae in front of the examiners is a serious disadvantage indeed.
	Another extraordinary thing is that there was no distinction made between an MD of Cambridge and an MD of Harvard or Pisa. Is there a difference? All the difference in the world—they are completely different exams. On average, a Cambridge MD is taken six years after you are qualified, and means that you have worked extremely hard for a long time and produced a thesis, which is no mean accomplishment. Of course candidates in Harvard are of a very high standard but its MD is a qualifying exam. An MD Pisa—well, someone said, "Say no more". Perhaps I should point out that you can start as a medical student in some Italian universities simply if you want to. To be fair, such students are weeded out later but a very different system is used. The three MDs are totally different.
	Another issue that arose in the other place was that the USA has had the system, which we will introduce, for 50 years—but it is not the same system. What happens is that candidates in the United States put their preferences in order and the hospitals and universities to which they are applying put their candidates in order of preference; that is a rather different system. Another point that emerged—we need to nail this one—was that the old system was terrible and was just an old boys' system. I am afraid that that is not true. Just across the river at St Guy's Hospital, for 50 years we have had a system whereby the candidates put the jobs that they want in order of preference, and so do the consultants. The junior staff vet the process, and their recommendations go to the consultants, who usually accept them. There is no way in which anyone can fix an appointment.
	Finally, I repeat that it is a pity that the Secretary of State did not apologise. I am sure that the Minister will.

Baroness Barker: My Lords, it is astonishing that an initiative that was welcomed at the outset by all those involved in the process—the deaneries, the junior doctors and employers—could have gone so spectacularly wrong in execution. There was an agreement among most of those involved that it would be preferable to move towards a better technological system. However, it has quickly become apparent that what was going to emerge was nothing like what had been envisaged. The junior doctors' committee of the BMA has been warning for more than a year that what would emerge from the proposals would not work, would be insufficiently sensitive and would be crude in application. So it has proven to be. That begs the question why the department has taken until the beginning of March to realise the extent of the system's deficiencies; we know that the application system is due to be completed for posts that are supposed to begin in August.
	The system's deficiencies are clear not just in application but in design. The noble Lord, Lord McColl, referred to some of them but there are more. They are at their most deficient in that they give insufficient weight to people's experience of research in pursuit of academic medicine. We have discussed many times in this House how the NHS has, in view of the access that it gives to large numbers of patients, perhaps the greatest potential in the world for a mix of practical medical care and research. It is only for the want of proper systems that we do not have—although we should have—the best medical and biomedical research system in the world. This application system clearly takes very little into account. That must be wrong and disadvantageous.
	Will the Minister comment on reports in the past few days that the new system's implementation has involved many non-medical staff in the appointment process? That is rather strange. One wonders, given the debacle before us, whether it is another sign of management consultancy in the NHS having gone several steps too far. Will he also explain what is meant by "career guidance", which he mentioned twice during the Statement? It is a phrase that strikes fear in other walks of life and I wonder whether it does here, too.
	We have concentrated mostly on what is an astonishingly bad process, but another matter has lain somewhat hidden behind the headlines. What will happen to the doctors who clearly will not get a post under MMC? The department's press release issued at the end of last week stated that there will be lots of posts. What sort of posts will they be? Will they be for hospital doctors or GPs? Who will they be going to and how will that be decided?
	This has been an amazing process to witness from the outside. It has clearly caused distress to applicants and dissatisfaction to the deaneries, and ultimately it must be a distraction from patient care and research over the next few months. I do not believe that the process can be stopped but can the Minister tell us what, if any, scope there is to reschedule its later stages in the interests of fairness and of ensuring that the best-qualified candidates get the opportunity to apply for the posts for which they are best suited?

Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Lord, Lord McColl, and the noble Baroness, Lady Barker, for their comments and questions on the Statement. I make it clear that we should appoint the best people possible to take on these training posts, as they lead to the most senior medical consultant and general practitioner positions in the country. It is very important not only that we select the right people but that the training that these doctors are then given is up to scratch. I also very much agree with the noble Baroness, Lady Barker, that, as well as ensuring that we have the best possible clinicians, we should never underestimate—I certainly would not do so—the contribution that doctors make more generally to science and to the research base in this country.
	I say to the noble Lord, Lord McColl, that the Statement certainly recognises the stress caused to many junior doctors by aspects of the current system. This has always been a competitive process, and I guess that for junior doctors there has always been a high degree of stress. I have already answered this but let me get right to the point: where failings have caused problems for junior doctors, I, as a Minister responsible, must take responsibility. I do take responsibility for it; I would never run away from it. I have already said to junior doctors that, where they have been affected by problems with the system, I am very sorry for what has happened to them.
	I say to the noble Baroness, Lady Barker, that, as soon as the problems became known to Ministers, we convened a meeting with representatives of the medical royal colleges. We agreed to a review, and those holding the review have been meeting almost constantly over the past two weeks. The Statement last Friday represented enormous hard work by all concerned, including my officials, the medical royal colleges, representatives of the BMA and NHS employers. Everyone is working as hard as they can to deal with the problems identified. I very much hope that the announcement made on Friday and the Statement by my right honourable friend in another place made it clear that we are in the process of resolving these issues. The review will carry on, and we will look very carefully at its outcome at the end of this month. Of course, we will want to learn the lessons and ensure that, where appropriate, changes are made in the current situation and into the future.
	The system has worked well in some places, such as recruitment into GP specialty training. The noble Lord, Lord McColl, identified some of the inevitable challenges in the reform of the training programmes and selection to them.
	The noble Baroness, Lady Barker, is right to say that it would not have been sensible to stop the programme in its tracks. Indeed, we did not receive that advice from the review team. It has clearly worked for many people; stopping the process would just cause much greater uncertainty. The noble Baroness asked about rescheduling later rounds in the appointment process. Clearly, many more details need to be worked out. We will be guided by the review team. Of course, there are practical consequences for the health service, and we must remember the time that practising consultants have to spend in short-listing and interview committees. With all those caveats, the answer is yes: rescheduling will be considered. If it is thought to be the right thing to do, we should consider rescheduling.
	Career guidance means just that: guidance on the application process itself, with information on where the vacancies are in terms of area and specialty. It also means guidance for those who do not get through the competitive process. We should not run away from the fact that this should be a competition. We want the best doctors to be selected for the specialty training programmes, but that does not mean that those not selected should be lost either to the medical profession or to the NHS. Career guidance may be very helpful.
	The noble Lord, Lord McColl, referred to the old system. He is very experienced, and this House has great respect for him, so it is fair enough for him to say that in his own hospital things worked well. However, the general consensus is that the old system did not work well. Doctors had to submit many different applications across the country for jobs that might be for only six to 12 months. Often there could be many hundreds of applications for a single job, as short-listing processes were variable. That is why all those concerned—the Government, medical bodies and junior doctors—got together to work through a new process. The noble Baroness, Lady Barker, was right to raise that. Those bodies are now around the table finding answers to some of the issues raised. I am confident that we can ensure that the issues are dealt with. We will have a robust approach to ensuring that the right people are appointed to training posts.
	A number of comments were made about the scoring system. The processes were developed after much consideration by all the parties involved. I have taken account of noble Lords' remarks. It would be fair to say that the system has worked better with candidates who have just come out of the initial training, 84 per cent of whom have been offered interviews. The issue of the points system probably applies more to the more senior applicants. None the less, it is important to learn the lessons. I will listen very carefully to what the review team has to say about that. I have responsibility for research and development and for the pharmaceutical industry, and, as I am sure noble Lords will recognise, I want the best possible research and clinical academic doctors in this country. I want to ensure that the system that we develop gets the best individuals.
	The scoring and competency-based approach arose out of discussions and the Chief Medical Officer's 2002 report which found that, in addition to academic and technical skills, it is necessary to recognise, for example, doctors' communication skills with patients. We have had many discussions in this House about the need to enhance communication skills. However, I recognise that the scoring system as a whole is subject to comment, and we will listen very carefully to what the review group says.

Lord Turnberg: My Lords, I am grateful to my noble friend for his responses, which were very helpful. This has been an extremely traumatic experience for many young trainee doctors, who feel very frustrated and uncertain about their future. It has left many considering moving abroad.
	The application forms made it nearly impossible to judge who should be shortlisted. The forms were anonymous and largely ignored details of applicants' CVs, previous skills, experience and training. They relied heavily on essay-type questions that anyone with access to the internet and reasonable creative writing skills could answer.
	I am not trying to lay blame, because many parties have been involved in getting to this point, but I hope that my noble friend agrees that we should go back to the beginning and look at the application forms to ensure that they include details of what candidates have done and achieved and that they do not get involved in marking that is clearly erroneous.

Lord Hunt of Kings Heath: My Lords, I thank my noble friend. I accept that this has been a difficult time for many junior doctors, and I understand how important being accepted for a specialty training place is for their career in medicine. I am not unmindful of the pressures on those junior doctors, but my understanding and experience is that it has always been a traumatic time for them. The process we now have is more transparent and has been organised on a national basis so, in a sense, that trauma is shared by many more people. We clearly need to do everything we can to make sure that the system is transparent, fair and felt to be fair and that people see the logic behind the application process and the interviews.
	I should perhaps have said to the noble Lord, Lord McColl—or perhaps it was the noble Baroness, Lady Barker—that it is critical that doctors are involved in shortlisting and interviewing. I confirm that the key people making decisions are clinicians.
	I will listen very carefully to what the review team says about the information in the application form. As a result of the discussions in that review, evidence of excellence in the form of a portfolio or a CV may be presented as part of the selection process. I hope that that meets some of the concerns that my noble friend raised.

Baroness Masham of Ilton: My Lords, how much notice is taken of references in selection? Is it not important that the very best doctors are selected for the specialty of their choice so that they have the necessary interest to give full commitment to the post, and to go on learning and improving? Surely, that is a definition of an expert. Is it not a fact that many people are becoming worried by the word "modernisation"?

Lord Hunt of Kings Heath: Ihope not, my Lords, because in the health service we are seeing many more doctors being trained and employed—30,000 more than in 1997, I think—and a huge commitment to improving the training of our doctors. That is part of the reform of the National Health Service that noble Lords have wanted and which is being put into action. The programme of training running alongside Modernising Medical Careers is intended to be much more cohesive and appropriate than the rather patchy approach that has existed for many years. However, I accept the comments of the noble Lord, Lord McColl, about his own experience.
	It is important that those making the critical decisions of appointing doctors to training posts have relevant information. That is why I said that evidence of excellence in the form of portfolio or CVs may be presented as part of the selection process. However, I believe that there has been some inconsistency between the deaneries responsible for administering the system in different parts of the country. Part of the review process will be to ensure that good practice is made known to all deaneries. I certainly accept the point made by the noble Baroness: we must appoint the right people.

Lord Blackwell: My Lords, the Minister says that a portfolio of experience may be presented. In a process that has taken so long to design, involved so much effort and that is so important to the NHS and to the doctors who have spent years in education, can he explain what he tells his doctors about why the system was designed so that their experience, CVs and references were given so little weight?

Lord Hunt of Kings Heath: My Lords, selection into each specialty was based on person specifications that were agreed with the Postgraduate Medical Education and Training Board and the royal colleges. Attributes that the doctor should have for that specialty are described there, becoming more specific as the level applied for in a training programme increases. The selection processes were devised with the input of stakeholders, including postgraduate deans, the medical royal colleges and trainees. The Academy of Medical Royal Colleges and junior doctors from the BMA were part of the stakeholder group responsible for developing the recruitment and selection processes. The application form asked applicants to provide evidence of their skills, experience and commitment—and, where appropriate, of their achievements in the specialty. Eligible applicants were considered for shortlisting by senior doctors in the specialty who were trained in the process.
	The principles that I have just described to the noble Lord were agreed by all the stakeholders. It is quite clear that some shortcomings, as noble Lords have mentioned, have been identified. Some of those may be due to a variation in practice from deanery to deanery; others because they have been identified as the system has come to work in practice. As I have said, the review team continues to meet and there are still more details that need to be agreed. We await its final report at the end of this month; that will inform how the process will proceed. Where problems have been identified, I am keen that we put them right.

Lord Winston: My Lords, I think that we are very grateful to the Minister for his apology about what has happened. We all recognise that he has been one of the most popular Ministers with the medical profession in the health service for the good that he has done, for which we are very grateful. Frankly, however, this situation has been a bit of a disaster. I suspect that it is not really the current Minister's doing; none the less, it needs to be put right urgently.
	Unfortunately, we are still hearing one or two buzzwords that I would rather not hear. The Minister used the word "transparent". I do not believe that this process is truly transparent. There has always been competition for jobs, and it is right that there should be, because competition should ensure that the best people for the job get it. However, the current competition certainly does not allow for that; nor is it fair or logical. Of course every patient wants communication, but ultimately what they want above all from their doctor is competence. This method of application does not allow for competence, because it is purely subjective. The whole form is badly designed.
	I speak as someone who has a conflict of interests. I have a son who has just gone through this process. His PhD yielded 11 publications in good peer-review journals. None of that could be shown on the form; nor could someone who has worked with him give him a reference. A young woman who works in my laboratory started as a science graduate and gave up every summer and winter holiday to work in the laboratory voluntarily. She managed to raise funds to maintain the research that she was doing and got her trips to California paid for three times. She went through medical school at my suggestion and has been absolutely assiduous at every stage. However, the trouble is that, although she has given up every holiday, she is now in this system and I cannot give her a reference, even though she is absolutely outstanding. That is quite shocking because the quality of the reference is very important, and we must accept that it is the only way in which you can judge someone's initial competence when they apply for a job. I therefore hope that the Minister will review this whole method of application very carefully after the initial impact has been dealt with.

Lord Hunt of Kings Heath: My Lords, I am grateful to my noble friend. I am sure he will accept that it was better to convene this review group to deal with the immediate issues that have been raised and to allow round 1 to continue, and then to listen further to the review team to see what further changes might be made in round 2 and to learn further lessons about how such a process can be implemented in future years. I give that commitment to my noble friend. It is fair to say that the application form is not about testing clinical skills; it cannot do that. Its purpose is to choose people for interview, where evidence of their competence in given areas can be further assessed. The questions were designed in partnership with the Academy of Medical Royal Colleges, training representatives and other stakeholders. I fully accept that it is important that all those stakeholders, particularly the junior doctors who are applying for specialist training programmes, need to have confidence in the process. I am committed to doing that, to listening very carefully to the review group and to making necessary changes. I shall take very careful note of what my noble friend has said.

Lord Harris of Haringey: My Lords, I, too, declare an interest in that my son is also going through this process. I am also grateful for the Minister's apology. I take it from his apology that he is aware of the devastating morale implications of how this process has panned out and the changes that have taken place because of the difficulties that arose and the consequences that have resulted. For example, people have to scurry around at short notice in the midst of differing shift patterns to get references, which are now being accepted and have to be signed in person.
	I have a question about the process of short-listing and the task of the consultants and those who have to do it. I am aware that any process designed by a committee is going to be much better than one designed by an individual—that necessarily follows. However, this process requires people to consider a series of 150-word statements, many of which will be similar in tone and nature, if not identical in wording, and to look at many dozen—and in some instances several hundred—such applications in a short period. I wonder whether those who advised on this system had thought about the practicalities. Many of us who have been involved in other forms of selection processes recognise how difficult it is to look at what are essentially standard statements and distinguish between them. I wonder how sensible it was, and how much this was reviewed by those who are experienced in this sort of selection process.

Lord Hunt of Kings Heath: My Lords, my noble friend raises an interesting point. I fully understand the difficult time that this has inevitably caused for junior doctors. However, whatever system had been adopted, choosing junior doctors to go on to specialty training courses will inevitably, like other tough selection procedures, prove a stressful time. But of course we need to make sure that those junior doctors have confidence in the processes and procedures they go through. That is the importance of the work of the review team, to which we will listen carefully.
	Let me make it clear that applications were scored only by doctors. Preparatory work was done by the individual deaneries, which were responsible for the administration of this system, to help doctors in the most effective way possible. Again, I will want to listen to the feedback from doctors involved in both the short-listing and the interview process to see if there are areas where improvement can be made. That is the whole purpose of the review team. I offer enormous thanks for the time the doctors involved have given up so far and will give up in the future. However, it would not be fair to say that they were not given appropriate guidance and support, and I am keen to learn any lessons that have come as a result of their experience.

Lord Colwyn: My Lords, the numbers in the dental profession are much smaller, but is the Minister aware of any plans to expand this recruitment and selection process to specialisms in dentistry?

Lord Hunt of Kings Heath: My Lords, I am not, but I am ever open to suggestions.

Lord Rea: My Lords, it is perfectly clear that a number of candidates of very high calibre have been missed and not offered interviews. Perhaps this is a question for Professor Douglas's review group, but does this not have a knock-on effect in that those who have already received interviews may be some of those who are perhaps not of such high calibre? There is a limited number of posts and some of the people who are perhaps not the crème de la crème may already have been recommended for them—or if not appointed. Is this not going to somewhat queer the pitch even if all those doctors who have been refused interviews eventually get one?

Lord Hunt of Kings Heath: My Lords, I can tell my noble friend that my officials have taken careful advice on the appropriateness of the procedures that are now going to be adopted. No appointments have been made in round 1. I can also tell him that the initial feedback from those doctors who have already undertaken interviews is that a very high standard of candidate has been short-listed. But the importance of the Statement last Friday is that it enables us to strengthen the process in round 1. It means that all applicants at ST1—the first level of the specialty training—who have not been short-listed for any interviews will have their application reviewed and may be offered an interview in round one. That is the most appropriate way to try to deal with the issues immediately, but as I have said to my noble friend, we have sought advice and we are confident that this is the correct way to proceed.

Lord Brooke of Alverthorpe: My Lords, I would like to pick up on the point made by the noble Baroness, Lady Barker. When everyone embarked on this journey we were in general agreement that there was a case for change; that life was not perfect under the old regime. First, I would like to know when these discussions commenced. Secondly, could the Minister indicate at which point, in his opinion, things started to go wrong? Thirdly, I would like to address a question to some of my colleagues here. How do we know that these people who have not been selected are of high calibre? Who is making the judgment about this?
	I was in one of our famous hospitals on Friday afternoon, being tended to by a young junior doctor who told me that she was generally in favour of the changes being proposed. She was of Asian extraction. She said she believed that under the system she would have a much better chance of being able to compete for the better posts that were to be filled. She was generally in favour, but she believed that there would be strong resistance—as there always is, in her opinion—to any change, particularly from consultants and from people of the old school, as she described it. She says there is still an old-boys system operating which she found quite unacceptable—I raised this with the noble Lord, Lord McColl, at lunchtime. There will be a whole range of different views on this, but when does the Minister believe that the situation will be resolved to, as is hoped, everyone's satisfaction? Those of us who do not have a vested interest other than simply being patients in the NHS want to ensure that, as the Government proceed with their programme of modernisation, there is a direct link between delivering the agreements reached by the stakeholders and the way in which those stakeholders are subsequently rewarded with the taxpayers' money, to which we all subscribe.

Lord Hunt of Kings Heath: My Lords, I understand that there have been intensive discussions about the new system among all the stakeholders I have mentioned over the past four years. My noble friend then referred to the old system. Of course, one of the problems that has always been perceived within it has been the question of whether there was an old-boy network. There has been some evidence of that. But there were also concerns that junior doctors went from job to job without properly focused training. As I have said already, junior doctors often applied to many different institutions. Often hundreds of applications were received for one post. The whole system was completely unsatisfactory. That is why the stakeholders got round the table to devise a new system. I have no doubt whatever that coming out of this will be a fairer, better approach to the selection and training of doctors to go on these important, specialty training programmes.
	Equally, it has been clear that there have been some practical teething problems with some of the deaneries and the way the process has been approached. The purpose of the review team is to learn those lessons and put things right that need to be put right and then to proceed with the general principles of a fair process designed to ensure that the best possible doctors are selected for specialty training programmes to the benefit of the National Health Service and the people of this country.

Welfare Reform Bill

Consideration of amendments on Report resumed.
	Clause 10 [Work-focused health-related assessments]:
	[Amendments Nos. 17 to 21 not moved.]

Lord Addington: moved Amendment No. 22:
	Clause 10 , page 8, line 25, leave out "within a prescribed period, show that he had" and insert "have"

Lord Addington: My Lords, Amendments Nos. 22, 38 and 42 have the same basic principle. We know from the draft regulations that if a person fails to get to the interview, they have five days in which to lodge the reason why they had good cause to fail. Virtually everywhere else in the system, a person has a month to appeal and show good cause. I have here examples of why people might fail to attend and why this might not be appropriate, but one example sums this up: what happens if a person is knocked over on the way and is unconscious for six days? Why can we not have something to take care of that? A more frequent example might be mental health problems et cetera where a person has a mini-breakdown or a bad episode which takes them out of commission for that period of time, and they are unable to get in contact themselves and people cannot get in touch with them. They have lost track.
	According to my information, in the rest of the system a person has a month in which to react and register, and my amendment would bring this in line. The five-day period is far too short and arbitrary. It does not allow for variations in anyone's life, let alone the lives of those who are slightly more chaotic than the rest of us. I hope that the Minister will be able to assure us that this five-day period in the draft regulations will not be rigidly applied. If it is, people are bound to be left very short of money, possibly affecting their family and dependants. I beg to move.

Lord Taylor of Holbeach: My Lords, my noble friend and I have tabled Amendment No. 23 in response to concerns that have been raised by the Government's intention to give claimant customers just five days in which to show good cause for his or her failure to attend or to take part in the work-focused health-related assessment. The argument could equally well apply to any of the activities or interviews that will be subject to conditionality. We accept that some time limits should operate, but the test should be reasonableness rather than prescription. As it is, five days seems a rather short time in which to insist that a claimant customer must come up with proof, even if they have a further month to bring in new material. Of course, a claimant customer should be required to make all reasonable effort to explain why he or she missed an interview, but why can this not be all that is required?

Lord McKenzie of Luton: My Lords, the work-focused health-related assessment is a key component of providing support to return to work. It is the new, forward-looking and positively focused part of the transformed personal capability assessment. We believe the work-focused health-related assessment has a vital part to play in customers moving away from a dependency on benefits and into work, and we want all those entitled to the employment and support allowance to take part. Similarly, the work-focused interview is crucial to effective engagement with customers. It is the gateway to the advice, rehabilitation, financial assistance and other provisions available in Pathways to Work areas. Work-related activity will provide a vehicle for customers to take practical steps and move closer to the labour market.
	It is central to our welfare reforms that customers engage with the support that is available. We believe that when it is reasonable for someone to participate, there should be a requirement for them to do so. Ultimately, a failure or refusal to take part for no good reason can lead to sanctions. However, our aim is that the rules should be applied fairly and sensitively. We use the concept of good cause because we know there will be times when customers cannot reasonably be expected to comply with a requirement. In these circumstances, a sanction will not be imposed. We have no intention of imposing sanctions when a reasonable explanation is offered for non-participation.
	As I said in Committee, the draft regulations for Clause 10 include matters that are to be taken into account in determining whether a customer has shown good cause for not taking part in an assessment. These include the state of the customer's health and the nature of his disability at the time of the assessment. The draft work-focused interview regulations set out a non-exhaustive list of matters that may be taken into account in determining whether a customer has shown good cause for not taking part in an interview. These are intended to cover a wide range of possible circumstances and will help ensure fair treatment for all, including the most vulnerable. This will include customers whose physical or mental condition will sometimes mean that it would be impossible to expect them to take part in an interview at a given time. The safeguards listed in the supporting material provided to the House include visiting every customer, with their representative if appropriate, with a stated mental health condition or learning disability if a sanction is to be imposed.
	Within the context of the safeguards that I have outlined, it is not unreasonable to expect that in most cases, customers who are unable to participate will be able to provide an explanation. Again, in most circumstances, it is not unreasonable to expect that explanation within a few days. The draft work-focused interview regulations and the draft work-focused health-related assessment regulations refer to five working days. However, the draft work-focused interview regulations provide that if a sanction is imposed for a failure to show good cause, this decision can be revised if within a month the customer provides relevant information showing good cause that could not reasonably have been brought to our attention within five days. We are still considering whether a similar provision is needed in respect of work-focused health-related assessments.
	Without the provisions in the Bill as it stands, my concern is that fewer people on the employment and support allowance will engage with the help and support provided to assist them to return to work. The amendment would give customers unlimited time in which to show good cause and would introduce unacceptable uncertainty into the conditionality procedures. This would seriously undermine the conditionality and sanctions regime. I do not believe that noble Lords intend that, but it could be a consequence of their amendments. I hope that I have been able to reassure noble Lords that the protections around good cause are a reasonable approach and a fair way to proceed.

Lord Addington: My Lords, is the five days a guideline or an absolute, which is important for both of us?

Lord McKenzie of Luton: My Lords, five working days is the period in which a response is required and is a reasonable period of time in which to show good cause. It is the same as that used in Pathways to Work, and we have received no evidence of problems. If someone does not turn up for a work-focused interview and subsequently shows good cause, that could be taken into account. The protections for "good cause" are real and substantial, particularly focusing on the health of the customer involved.

Lord Addington: My Lords, I think that that was close to saying there is some flexibility, but we will have to have a look at that. Perhaps I should say that I hope that that is the interpretation to be drawn from what the noble Lord has said. Therefore, provided those who are more expert in this area of law than I make that interpretation, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 23 to 28 not moved.]

Baroness Meacher: moved Amendment No. 29:
	Clause 10 , page 9, line 12, after "a" insert "suitably qualified"

Baroness Meacher: My Lords, I will be extremely brief. This apparently minor amendment, if accepted by the Minister, could avoid many unnecessary appeals and the uncertainty and worry for claimants who are wrongly assessed. The amendment would ensure that assessments of potential ESA claimants would be undertaken by suitably qualified people. Historically, mental health assessments were often undertaken by people with no specialist knowledge of mental illness. The result was an unacceptable number of errors, as evidenced by the extraordinarily high level of successful appeals in this category. I hope that the Minister will agree that the new, more demanding and less secure system should be based on assessments by professionals who have the knowledge base to understand the employment implications of different diagnoses and clusters of symptoms, as well as the likely consequences of different medications.
	As noble Lords know, the assessment is based on functional capabilities rather than diagnoses under the new system. Nevertheless, considering the descriptors in the mental, cognitive and intellectual function assessment, the task surely requires some judgment based on the diagnosis of the claimant. To take one example, in descriptor 19(e) on dealing with other people, the task is to assess whether the claimant is,
	"unaware of impact of own behaviour to the extent that ... has difficulty relating to others for prolonged periods, such as a week",
	or,
	"frequently causes distress to others".
	It is difficult to imagine making a true assessment of those types of issues on the basis of a question and answer session unless the interviewer has a good understanding of a person's mental health problem and the treatments available to deal with it.
	Perhaps the Minister could advise the House what stipulations will be made about the qualifications and experience of people approved to undertake mental health assessments. I hope that he will agree to this amendment. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, I support the amendment in the names of the noble Baroness, Lady Meacher, my noble friend and myself. The noble Baroness made the points very clearly. We support them and look forward to hearing the Minister's answer. My Amendment No. 89 in this group deals with the definition of healthcare professionals.
	I do not propose to repeat the extensive discussion that we had in Grand Committee, but I thank the Minister for the letter he wrote to me on 6 March attempting—only attempting, I am afraid—to clarify the Government's position. It contains a lot of talk about appropriate skills and the department's chief medical adviser, but it does not clarify what I can only call the grey area at the end of what the Government are talking about. We all agree that a doctor, nurse, occupational therapist or physiotherapist registered with the Health Professions Council is clearly a healthcare professional. But can the Minister give us a proper answer about what other categories can or will be included and on what basis? Our definition in Amendment No. 89 describes a,
	"member of such other profession, regulated by a recognised professional or medical body, as may be prescribed in regulations".
	I hope that he accepts our amendment.

Lord Skelmersdale: My Lords, there can be no dispute of the need for healthcare professionals to be properly trained in the disabilities of their clients—whether physical or mental. But it is equally essential to use occupational therapists, especially in helping the personal advisers understand what treatments and medical aids there are to help overcome the limitations, which may not have been suggested to him or her by the original medical professional with whom he or she dealt before applying for ESA.

Baroness Morgan of Drefelin: My Lords, Amendment No. 29 would ensure that healthcare professionals carrying out work-focused health-related assessments are suitably qualified to do so. As currently happens with Atos Origin doctors, all healthcare professionals who conduct work-focused health-related assessments will undergo training specified and agreed by the department's chief medical adviser, before being approved on behalf of the Secretary of State to carry out assessments. This will ensure that any healthcare professional carrying out a work-focused health-related assessment is suitably qualified to carry out all aspects of that assessment.

Baroness Meacher: My Lords, what depth of training will these people receive? It is just not the same thing if someone is sent for a little training before they do this work but they do not have the in-depth qualification of a health professional appropriate to the particular disability. There is a tendency in government in general to think that one can just provide a few days or a week of training, but then you do not have a suitably trained healthcare professional.

Baroness Morgan of Drefelin: My Lords, I hope that I can reassure the noble Baroness further. When I talk about Atos Origin doctors I mean medically qualified doctors. I will expand on that further if I may.
	Appointment by the Secretary of State will ensure that any healthcare professional carrying out a work-focused health-related assessment is suitably qualified to carry out all aspects of that assessment and has been trained to the standard that the Secretary of State considers appropriate. If the healthcare professional does not have the appropriate qualifications or has not been trained to the appropriate level, he or she will not be approved to carry out the assessments.
	The healthcare professionals will receive training to equip them with the skills needed to identify the health-related barriers to work and possible health interventions which will be required when conducting work-focused health-related assessments.
	I turn now to Amendment No. 89. Clause 61 relates to the use of healthcare professionals in social security benefit assessments and covers a range of benefits. However, the definition of a healthcare professional is also referred to in Clause 10(8), which relates specifically to the new benefit, ESA. It is important that we maintain a consistent position throughout the legislation. I understand the concerns which have been expressed about the need to ensure that only appropriate healthcare professionals are used to carry out assessments. We all agree that only properly trained healthcare professionals with appropriate skills should be used to carry out medical examinations. As I have said, we have the added security and safeguard that all healthcare professionals must be approved by the Secretary of State before they can undertake medical examinations.
	We have no plans to use healthcare professionals who are not members of a regulated profession. Bearing that and the Government's commitment towards regulating more healthcare professions in mind, we agree with the principle behind the amendment and believe it would be appropriate to look again at the way we have approached the structure of the legislation here. I believe that we are able to meet the concerns that have been raised, while retaining flexibility to use other professionals from regulated professions, should it prove appropriate to do so to address any skills gap which may be identified in the future.
	With the House's agreement, we would like to take away Clauses 61 and 10 and consider further an alternative wording which would address noble Lords' concerns. We discussed this at some length in Grand Committee and my noble friend has written to the noble Lord, Lord Oakeshott. I believe that we will be able to return at Third Reading with a practical solution which will meet noble Lords' concerns.
	I shall deal with one point about the training that all healthcare professionals get in assessing mental health conditions. We will ensure that that remains up to date and effective. For ESA, there will also be assessments of people with learning difficulties, many of whom are currently exempt from undergoing a PCA. We shall ensure that people get the appropriate training.
	As for appeals, most of them take place because the relevant information is unavailable to the decision-maker at the time of the decision. That is something that we discussed in Committee.
	I hope that, given the suggestion that I have made, the noble Baroness will withdraw the amendment.

Lord Oakeshott of Seagrove Bay: My Lords, I listened carefully to the Minister's remarks and I thank her for suggesting that there might be some helpful movement in our direction. However, I cannot quite see why she does not simply accept the wording of paragraph (d) in Amendment No. 89, as it seems pretty clear and deals with the point. I should be happy to change the wording, depending on whether she wanted to say "regulated by" or "registered with", but it is still a very important principle that other healthcare professionals should be regulated by or registered with a,
	"recognised professional or medical body",
	and that there are no further loopholes or amendments. I kept hearing the Minister talking about "appropriate" and the Chief Medical Officer, but that is a circular argument. On the basis that she has accepted paragraph (d) of my amendment, perhaps with slight wording changes, which is what I hope that I am hearing, I shall be happy not to press the amendment to a Division.

Baroness Meacher: My Lords, I, too, thank the Minister for her comments and her agreement to take the issues away to review them further. She made the point that assessors are generally medical practitioners. However, the point is that a lot of GPs do not have any training in psychiatry, believe it or not; they chose all sorts of specialties in which to train, but they would not necessarily have had six months' training in psychiatry. The point that I hope the Minister takes away is that it is important that, if people are doing mental health assessments, they have training in mental health.
	I am grateful to the Minister for agreeing to take these matters away and hope that she will take that into account and agree that people need to be suitably qualified. By that we mean that they should have had considerable training and experience in handling these complex matters. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 30 not moved.]

Lord Skelmersdale: moved Amendment No. 31:
	Clause 10 , page 9, line 12, after "professional" insert "and a personal advisor"

Lord Skelmersdale: My Lords, this amendment would implement a rather more substantial modification to the Bill than my previous amendments would have done. The key part of getting a customer to consider taking up work or work-related activity is the interaction between the personal adviser and the claimant. The amendment would introduce the personal adviser—and, thus, the positive support for the claimant that he or she should provide—at the earliest possible stage of the process.
	As I understand it, the work-focused health-related assessment currently appears rather clinical. After undergoing a tough eligibility test a claimant is required to go off to another test to be further questioned, this time with little or no explanation about what is to be achieved and what happens next. The personal adviser could and indeed should provide that.
	I understand why further medical assessment will be necessary. The first eligibility assessments are tightly defined by the descriptors whereas I imagine the assessment here would be much more wide-ranging and might even include some medical assessment of the customer's condition. The Minister will remember that I asked about that at the meeting that he so helpfully provided in the department the other day and was told that it would not involve complete undressing but that there might be a need for the customer to remove his jacket, for example, so that tests could be carried out on the flexibility of his shoulders or elbows. I am sure that the Minister will remember that. It is hardly invasive or embarrassing, so there does not appear to be a good reason why the personal adviser should not be present. It would make the assessment even more useful if it encompassed not only the medical possibilities and treatments that might be available but the non-medical training and activities that the claimant could undertake.
	The Minister raised the issue of confidentiality, which must place some limit on how involved the personal adviser can be, but I still feel that there would be a role for the adviser to play in fulfilling the work-focused element of the assessment more effectively and moving the claimant through the system quicker. That is to everybody's advantage, not least that of the claimant. I beg to move.

Lord Addington: My Lords, I add my support to this. The WFHRA sounds like some appalling terrorist group—

A noble Lord: It may well be.

Lord Addington: My Lords, yes it may. If you brought in the advisers while you tried to discover somebody's capacity and get information together on them, there would be a degree not of joined-up government but of joined-up delivery of service, which is a very sensible idea. Trying to get professionals to speak together, cross-reference what is going on and to talk to the person involved is surely a good idea. I hope the Government will bring this in; I see no reason why they should not.

Baroness Morgan of Drefelin: My Lords, the work-focused health-related assessment—or WFHRA, as it is becoming called—will look at residual capability; that is, it will discover what the person can still do despite a disabling condition. It will also identify health-related interventions that could enhance that residual capability.
	The report of the assessment will go to the personal adviser who will carry out work-focused interviews with the customer. The customer and, with the customer's consent, his GP will also receive copies, but the report's main purpose is to provide information for the personal adviser about health-related issues, on which the personal adviser cannot be expected to have the necessary expertise.
	I can understand the need to take a holistic view of a customer in relation to work-related activity and to address all factors that may act as barriers to work. That is where the personal adviser idea could be coming from. It will be the role of the personal adviser to explore with the customer such issues as the need for training or social barriers to work. We are using healthcare professionals to carry out the work-focused health-related assessment because they have the necessary skills, which personal advisers do not, for assessing a customer's residual capability and assessing and advising on any health-related interventions that would enhance that capability.
	Requiring personal advisers to attend work-focused health-related assessments would not necessarily be a good use of the resource or skills at our disposal. The personal adviser would not be able to participate in the entire assessment, because they will not have the health-related skills to which I referred. For example, the assessment will identify when health-related interventions are needed, such as a course of physiotherapy or cognitive behavioural therapy, which would help customers to improve their capability and move closer to the workplace. It would not be realistic to expect personal advisers to be able to assess whether such an intervention would be appropriate for individual customers. It is better that the personal adviser's skills be used where they will add most value, carrying out work-focused interviews, and that the work-focused health-related assessment is left to the healthcare practitioners, for all the reasons that we have just debated, as they have the expertise to fill the gaps in the personal adviser's skills. In designing the work-focused health-related assessment, we are carefully considering what information will be most useful to the personal adviser. We shall seek feedback from personal advisers, which will be very important, when we pilot the work-focused health-related assessment in the near future.
	I fully understand the sentiments behind the amendment. As we discussed in Committee, we are trying to achieve an effective use of skills and division of labour between health professionals and personal advisers. Following this short debate, I hope that the noble Lord will consider withdrawing the amendment.

Lord Skelmersdale: My Lords, perhaps I should have read out the amendment, because the argument that the Minister has just produced, that the health professional would be sufficient for the purpose, is unquestionably right, but the amendment states that the health professional and a personal adviser should be at the interview/assessment together.
	The importance lies in what the noble Lord, Lord Addington, in referring to an earlier amendment, called the holistic approach—in this case, delivering the service together. The sooner a personal adviser is in contact with the claimant, the better it must clearly be. I have not yet heard any argument against these two individuals being present together at the same interview, but I have no doubt that I am just about to hear one.

Baroness Morgan of Drefelin: My Lords, perhaps I have not been as clear as I should have been on the practical implications. We are talking about 300,000 WFHRAs in 100 centres and a current figure of 1,000 personal advisers. What the amendment proposes would not be an effective use of the personal adviser resource. We might need eight to 10 personal advisers in each centre to carry out the WFHRAs. I understand the noble Lord's desire to give the best possible service to customers and to ensure that the work-focused health-related assessment is accessible and appropriate for each customer, but his amendment is not a practical way of going about it. Highly trained, expert health professionals will deliver the work-focused health-related assessment. It will be targeted at delivering the information that the personal advisers need. We are carefully using the pilot schemes to hone the interview and the reports that go to personal advisers. I hope that that practical information will encourage the noble Lord to think again.

Baroness Hollis of Heigham: My Lords, is not the Minister effectively saying not only that many of those personal advisers would do nothing else but sit in on other people's interviews, thus not allowing them to use the skills in which they receive specialist training—supporting moves back into the labour market, testing work and so on—but also that there could be a real problem in terms of tribunal review if a personal adviser who becomes a decision-maker has the decision in which they took part reviewed? That could apply to two stages: not only the interview but subsequently the benefit allocated. That would put the tribunal procedure in a very difficult position. Will the Minister confirm both those points?

Baroness Morgan of Drefelin: My Lords, I endorse what my noble friend said. We need to think also about the cost. We are looking at a very carefully balanced division of labour and trying to use the skills of the health professional and those of the personal adviser where they are most needed. If we had a requirement for additional personal advisers—let us say, 500 more—that could cost, I am advised, around £10 million.

Lord Skelmersdale: My Lords, the amendment has elicited more information than I had expected. If there are 300,000 assessments in any one year and currently 1,000 personal advisers, one wonders how many medical professionals there are or will be. Are there more or fewer than 1,000?
	The noble Baroness, Lady Hollis, made a point about tribunals. I do not see how the assessment or findings of the tribunal could be affected by someone who, as she described them, is just sitting there.

Baroness Hollis of Heigham: My Lords, I meant that if somebody chooses to appeal a decision, the position of the adviser may be compromised by having taken part or sat in on the original medical examination.

Lord Skelmersdale: My Lords, this discussion is rapidly beginning to sound like one that we would have in Committee. The noble Baroness's point presupposes that the personal adviser will advise when matters proceed to a tribunal. That is extremely unlikely and undesirable.
	I am not convinced by the Minister's argument. I simply cannot see the disadvantages of my proposal, because the personal adviser would not interfere in any way with the activities of the health professional.

Baroness Morgan of Drefelin: My Lords, perhaps I may stress the risk of upsetting the balance between resources carefully allocated to health professionals working with Atos Origin doctors, of whom there are more than 1,000, and undertaking work-focused health-related assessments, and those allocated to personal advisers, who sometimes meet clients many times, as we know, to get customers closer to the workplace through their knowledge of local workplaces and the local employment market. Ideally, we would not want to have two professionals working in one interview. The most effective use of resources would be a division of labour between the expert health professionals and expert personal advisers, working to their different but very important remits.

Lord Skelmersdale: My Lords, that added information gives me a fraction more hope. The Minister has finally driven me off the idea of seeking the opinion of the House on this amendment. I shall withdraw it, but with the proviso that I shall study even more carefully than usual the Official Report tomorrow morning and reserve the right to come back to this at the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 32 to 35 not moved.]
	Clause 11 [Work-focused interviews]:
	[Amendment No. 36 not moved.]

Lord Skelmersdale: moved Amendment No. 37:
	Clause 11, page 9, line 43, at end insert—
	"( ) for the role of carers in work-focused interviews;"

Lord Skelmersdale: My Lords, these probing amendments seek reassurances on the role of carers in ESA, which has barely been mentioned. After Committee, I received a letter highlighting this lack of debate and I am glad that this timely reminder means that I can seek some answers to this subject. The letter was from a carer receiving carer's allowance for his work supporting a disabled person. He has been left entirely uninformed about what expectations would be placed on him should the person for whom he cares be placed in the work-related group and therefore become subject to conditionality.
	We have established that a claimant may bring a supportive person, such as a carer, to an interview or an assessment, but where will that end? Will expenses be provided for a claimant to bring their carer? Will judgments be made on their capabilities on the assumption that their carer will always be present? If work-related activity is suggested on the ground that a carer will be present, what will happen if the carer finds himself—or, more likely, herself—unable to attend? Will the claimant be subject to sanctions if they are unable to achieve what is expected of them?
	A carer's benefits could be put at risk. If a claimant is judged able to take part in work-related activity without a carer present, the amount of time that a carer is judged as engaging in care may fall sufficiently for them to lose their allowance despite having little or no say in the work-related activity expected of the ESA claimant. This amendment is purely investigatory, but I beg to move.

Baroness Morgan of Drefelin: My Lords, the Government understand the wish to ensure proper support and advocacy for employment and support allowance customers. They acknowledged those concerns when introducing the Pathways to Work pilots. In their consultation response, the Government published safeguards that would apply in the pilot areas, which included encouraging advocacy support if needed and, in the context of home visits by Jobcentre Plus staff, suggesting that a representative should be present where appropriate. In many cases, a carer might well be the most appropriate person to be present, although we would not wish to exclude a customer from being accompanied by someone who would not necessarily be seen as a carer.
	These measures have been put into practice in the Pathways areas. It is not unusual for incapacity benefit customers to be accompanied in interviews by support workers, helpers from voluntary organisations, partners or family members. It is fully accepted that that makes for a more constructive discussion on the part of the personal adviser and a more reassuring experience for the customer.
	We are in no doubt that customers—and the success of their participation—will benefit from having someone to support them during work-related activity. We will make it clear to them and their representatives that they are very welcome to involve any suitable person to support them during their work-related activity. That person might be a carer. I can offer assurances that a carer's allowance will not be affected by accompanying a customer to interviews and on work-related activity. Nor will it be affected if the customer is paid reasonable expenses, such as travel costs.
	As I made clear earlier, the presence of intermediaries is firmly established as the normal procedure for conducting interviews. However, it would not be appropriate to place requirements either on customers or their carers to ensure that the customer was accompanied at interviews or while undertaking work-related activities. Nor is it necessary to spell out a specified role for carers in the Bill. I urge the noble Lord to withdraw his amendment.

Lord Skelmersdale: My Lords, seldom has a probe been quite so successful. That will satisfy my correspondent no end, especially the Minister's remarks about what would and would not affect the claiming of carer's allowance and the changes that this would make to it. I hope that that will be sufficient. I have pleasure in withdrawing the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 38 and 39 not moved.]

Baroness Thomas of Winchester: moved Amendment No. 40:
	Clause 11, page 10, line 34, at end insert—
	"( ) Where a work-focused health-related assessment has identified steps to improve a person's capability for work and those services necessary to support the taking of those steps have not been made available to him he shall continue to be entitled to the full amount payable to him in respect of the allowance."

Baroness Thomas of Winchester: My Lords, the amendment is designed to prevent sanctions from being applied to people who need help rather than a penalty. In Grand Committee, we heard from the noble Lord, Lord Layard, who told us that people with treatable conditions need treatment. I was particularly shocked to discover that less than half the people who are mentally ill receive any treatment at all. In this day and age, it is incredible to think that those people are likely to be penalised under this Bill because they are not receiving appropriate treatment for their illness. I know that the Minister will not like the word "penalise", because the withdrawal of the work-related activity component is, according to his brief, an,
	"incentive to engage, not a punishment".
	I think that most people will regard it as some sort of punishment.
	I took his point in Grand Committee that his department supports the Department of Health programme on improving access to psychological therapies. However, I wonder whether enough people are being trained in evidence-based psychological therapies so that, as the Bill is rolled out in all areas, those therapies can be offered throughout the country. The figure of about £750 to train someone in cognitive behavioural therapy is, as the noble Lord, Lord Layard, said in Committee, the cost of incapacity benefit for one month. The more people who are qualified in this important branch of mental health, the better. I beg to move.

Baroness Meacher: My Lords, in supporting this amendment, I thank the Minister for our very helpful discussion. I believe that we are all of one mind in wanting evidence-based psychological therapies and good employment placement support to be available to people with mental health problems and others who would benefit significantly from such help. The overwhelming economic arguments in favour of government funding for those services were well rehearsed in Committee and we do not need to repeat them. We also understand the challenge for the DWP in pressing the Department of Health to ensure that it plays its part in maximising the success of the welfare reform policy.
	Nevertheless, this amendment would be a valuable lever at local level to generate pressure from Jobcentre Plus on primary care trusts and mental health trusts, such as my own, to provide high-quality CBT and job placement services, which they should be providing to honour the Government's manifesto and their social inclusion commitments. However, we know that mental health is always a Cinderella service that picks up the morsels left under the table once the demands of cancer, heart, paediatric and A&E services have been met.
	The logic is overwhelming. If the Government succeed in reducing by 1 million the number of people dependent on employment and support allowance, that will save billions, some of which could no doubt be spent on acute medical services. If the Government do not make the investment in the first place, they will be shooting themselves in the foot. We know from all the research studies that 50 per cent of people with depression and anxiety—the majority of the half of incapacity benefit claimants—who receive evidence-based cognitive behavioural therapy will recover. As the noble Baroness, Lady Thomas, has suggested, the case for spending £750 per person is irrefutable.
	How would the amendment achieve the Government's objective? If Jobcentre Plus could not apply sanctions at any stage of the process to a claimant assessed as needing CBT or other interventions that would enable them to become capable of work, surely it would enter into negotiations with its local PCT and mental health trust to ensure that the relevant therapies were provided. That detail cannot be included in the Bill.
	Therefore, without wishing to ask too much, I hope that the Minister will support this amendment. I also hope that he will assure us, first, that regulations will specify that the work-focused health-related assessment will include questions designed to identify whether each claimant suffers from depression, anxiety or another diagnosed mental health problem; secondly, that the assessment will specify whether the claimant has received CBT and, if not, recommend that it should be offered; and, thirdly, that the assessment will identify those claimants with mental health problems who should be referred for individual job placement and support. That term refers to specific evidence-based support in identifying suitable jobs and preparing for interview, and support through the process of returning to work.
	I would be happy to make available to the Minister the research evidence showing the cost-effectiveness of that approach. The answers to questions (a) to (c) would trigger the protection from sanctions until the evidence-based psychological therapy or other support had been made available to the claimant. Anyone not familiar with mental health problems could regard such safeguards as excessive. I suggest that the results of the Pathways pilots underline the need for evidence-based interventions with the 50 per cent of claimants who suffer from mental health problems, if the Government's welfare reform policy is to be a success. I hope that the Minister will be able to support the amendment.

Lord McKenzie of Luton: My Lords, first, I acknowledge the genuine concern that some noble Lords have about how this will work, particularly for people with mental health problems. I know that noble Lords table amendments with the very best of motives. I regret that I am not able to accept the amendment, but I hope that I can explain why. I understand the intention and we share the objective of wanting to make this work for all customers, especially those with mental health conditions.
	The work-focused health-related assessment is a tool to allow the personal adviser and the customer to understand what barriers a customer faces in returning to work. For most customers, it will cover a range of barriers, although, as we have said previously, the focus will be on the customer's own perceptions of the barriers resulting from their disabling condition and on identifying any health-related barriers that could be addressed with appropriate interventions. The work-focused health-related assessment will not prescribe what a customer must do. It will provide advice to the personal adviser carrying out work-focused interviews about interventions that would help the customer, but it is certainly not an instruction or a prescription to go away and do a particular type of work-related activity.
	For instance, a work-focused health-related assessment will not say to someone that they must undertake any type of treatment, including cognitive behaviour therapy. The work-focused health-related assessment does not produce a tick list of things that a customer can do that will mean that they can return to work. Instead, the assessment provides information to our advisers, who can then treat customers as individuals. Each individual will have their own journey. We know that some with severe conditions will want to, and can, move into work quickly. For others, it is a longer journey, and our approach recognises that.
	It is entirely right that we offer support to customers to overcome their barriers. That was the groundbreaking innovation of Pathways to Work. The Pathways offer was, and continues to be, based on customers engaging with us in return for support to help them to move back into work. We know that Pathways has changed many, many lives for the better. That is reflected by double the job entries in Pathways areas compared to non-Pathways areas. It is also seen through the one-to-one research that has shown that the support on offer is welcomed by customers and has helped them to overcome their barriers, even when work has not been a realistic option for them. At the heart of that is the fact that we have required customers to engage and that there are sanctions for the very small minority who do not. I stress that the required engagement in Pathways, and initially when ESA is introduced, is to attend up to six work-focused interviews. We encourage any activity beyond that, but it is on a purely voluntary basis. The system that required nothing of customers and gave nothing in return failed. It failed in terms of the numbers on incapacity benefit and in the lack of support for the aspirations of our customers.
	We have said that we want to go further in the future with the new benefit. We want to offer more information to the customer and to the personal adviser through the work-focused health-related assessment, and we want customers to engage in mandatory work-related activity in time. However, we have also said that work-related activity will be made mandatory only when we have the resources to do that. To be explicit, those resources will be needed to expand the provision of help and support. We have also made it clear that we will build this offer of help and support on the evidence from Pathways, including those provider-led areas that will be rolled out over the next couple of years.
	When we require customers to engage with that support through mandatory work-related activity, we have been very deliberate to allow customers a wide choice of what they can do. The definition in Clause 12(7) makes it clear that anything that improves the customer's chances of obtaining or retaining work will count as work-related activity. That is in line with our approach of treating customers as individuals.

Baroness Thomas of Winchester: My Lords, if the work-focused health-related assessment uncovers the need for some intervention in the mental health field, is there nothing that the doctor can do? Can he suggest anything to a personal adviser? Can the personal adviser do anything? No one can suggest to the claimant that this would help them into work. I wonder whether that could happen.

Lord McKenzie of Luton: My Lords, I understand the thrust of the point. No one is saying that if the work-focused health-related assessment identifies a course of treatment that might be beneficial for the individual, that is going to be ignored. Various things might flow from it. The GP would see the result of the assessment, with the agreement of the customer, and so could take steps to see what was available from the local PCT. It is possible, as resources allow and as we move further into work-related activity, that the provider may provide a course of treatment that deals with the item identified. It will not be ignored. The provider would not and is not being asked to guarantee that every recommendation or every point that is noted from that assessment would necessarily lead to specific health-related action. That is not the primary purpose of the assessment; but it is not to ignore it.
	The point that I am seeking to stress relates to whether anything in the assessment would lead to sanctions. What would generate sanctions at the moment, at this stage, is non-participation in the work-focused health-related interviews. In due course, when work-related activity is introduced, there could be sanctions attached to that. We do not anticipate that the work-focused health-related assessment will lead to a whole range of specific actions required of the customer that could lead to sanctions.
	I hope that that has helped the noble Baroness. I am happy to come back on it. I stress that we cannot force customers to undertake medical treatment; that would be wholly wrong. What comes from the assessment is building part of the evidence, in particular the discussion with the customer about how they see their condition impacting on their ability to move back to work.
	We recognise the need to be sensitive to the individual's circumstances when we require them to participate in interviews or activities. That is why, in Committee, I outlined the safeguards and flexibilities in the system to respond to the needs of all customers, particularly those with mental health conditions. I do not wish to go over those in full, but I reiterate that they include contacting customers to remind them of interviews or assessments, encouraging advocacy advice where necessary, and identifying any issues from medical evidence that may impact on attendance. Additionally, where a customer has a mental health condition or a learning disability, a visit is made to a customer, with their representative if appropriate, if a sanction is to be imposed. Personal advisers will also be able to defer a requirement to take part in a work-focused interview where that is appropriate in the circumstances, and that decision can be made in advance of the date of the interview.
	The help and support coupled with the responsibilities that we are rolling out through Pathways to Work and in relation to this Bill are groundbreaking. From the research that we have done, we know that this has been welcomed by our customers. I challenge the assertion that Pathways does not work for those with mental health conditions. The issues surrounding the early IFS research have been debated at length in Committee. However, that is only one element of the research looking at employment. In fact, research with individuals has shown some remarkable journeys for customers with mental health conditions. These have not always resulted in employment, yet the positive effects on customers who would never have been supported in the past are clear. Those are exactly the kind of journeys that we should support. I urge noble Lords, where possible, to visit their local Pathways to Work, to experience the real differences that support on offer is making. My office would be more than happy to make arrangements for noble Lords who wish to do that.
	In conclusion, I state again that there is considerable flexibility and protection in the system. We will roll out further provision of work-related activity, beyond what exists in Pathways to Work, before introducing mandatory work-related activity. The work-focused health-related assessment will be a tool to help the customer to understand and overcome his barriers. However, it is not a tick list and customers will rightly have the freedom to choose the type of support that is right for them. I hope that that has reassured, although I suspect not completely, the noble Baroness. I urge her to withdraw her amendment.

Baroness Thomas of Winchester: My Lords, I thank the Minister for his further explanation. Will he leave the channels of dialogue open to experts, such as the noble Baroness, Lady Meacher, in this very sensitive area before regulations are brought in, so that we can have the best possible result for people with mental health conditions?

Lord McKenzie of Luton: My Lords, we are very keen to continue dialogue on these matters. Much work is taking place, particularly in relation to CBT. There are the pilots that we debated before; the report commissioned by the Chancellor is due to be announced very soon; and work will rightly continue with stakeholders. On the specific regulations on the provisions in the Bill, which are moveable, we have to make progress. This is a hugely important area. The debate that we have had on the Bill and elsewhere has helped to raise the profile of some of the issues and it is very important that that debate continues.

Baroness Thomas of Winchester: My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 12 [Work-related activity]:
	[Amendments Nos. 41 to 45 not moved.]
	Clause 15 [Contracting out]:

Lord Skelmersdale: moved Amendment No. 46:
	Clause 15, page 12, line 43, at end insert ", excluding functions under regulations under any of section 10(2)(f), 10(4), 11(2)(g), 11(4), 12(2)(e) or 12(4)."

Lord Skelmersdale: My Lords, the way in which the Bill is drafted has caused no little confusion among my advisers—possibly the Minister too, judging from that laugh. Clause 15 allows the final decision on whether a claimant is to have his benefit reduced for non-compliance with the obligations to be attached to the payment of ESA, examples of which might be not turning up to an interview at the jobcentre or not seeing his personal adviser when he should. That could be done by any contractor; for example, a personal adviser or a health professional. Ministers have said that they have no plans at present to do that. However, I put it to the House that they should never let go of the ability either to pay or to withdraw social security benefits. These amendments, therefore, seek to remove any possibility that the Government will contract out the power to impose a sanction on a claimant or to make the final decision relating to whether he has fulfilled the conditionality requirements.
	I have already spoken of my concern about this in Committee and privately to the Minister. He has left me with the impression that even the Government are 100 per cent uncertain about contracting out those powers being the way to go. He is smiling again; he must be agreeing with me, for a change. It is equally clear that many representative organisations are as unhappy as I am. Therefore, I hope I may convince him that whatever the benefits that may accrue from contracting out some of the functions relating to the payment of ESA, the power to withdraw benefits should remain with the organisation that pays the benefits; namely, the Government. Any other situation runs the risk not only of subjecting claimants to a postcode lottery as regards the severity of the sanctions that they risk, because different contractors will operate in different parts of the country, but of the Government losing control of a vital tool in the achievement of their aim to reduce the numbers of disabled people unable to find or to keep employment.
	No matter how watertight the contracts are with the private or non-governmental organisations, some diversity will grow up as each organisation interprets the guidance and the requirements differently. The dangers of contracting out sanctions have been noted elsewhere. David Freud's recent report for the DWP states that sanctions should be administered through Jobcentre Plus, thus ensuring that the state remains responsible for those collecting benefits as a way of maintaining the significance of the sanction.
	Many organisations that intend to bid for the contracts when they are offered are also unwilling to take on the responsibility of imposing sanctions. Support for the amendment comes from Mencap, Rethink, the RNIB, Leonard Cheshire, the NAS and Action for Blind People. The list is long and illustrious. They feel not only that this will risk damaging the trust between themselves and the claimants that they have spent so much time and effort building up, but that they do not have employees suitably trained for or experienced in this sort of decision-making. I hope that the Government will listen carefully to this weight of opposition and accept at least a version of these amendments. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, we on these Benches stand shoulder to shoulder with the official Opposition. Our names are to these amendments. There must be no privatisation of benefit cuts. We oppose the Government's provisions in principle. The Joint Committee on Human Rights stated very powerfully:
	"We remain concerned that, generally, contract compliance will not provide effective protection for the Convention rights of individuals where the functions of public authorities are assumed on a day-to-day basis by a private commercial or voluntary organisation. We draw this matter to the attention of both Houses".
	The Government said in the other place and here in Committee that they have no current plans to do that, but they are fighting to the death to keep that option and to do it by regulation, when we shall not be able to amend it. In a Bill such as this, one has to state very clearly whether one will do that. We are completely against it; we believe that to give others that power would be an unacceptable abdication of responsibility by the state towards some of its most vulnerable citizens. We support the amendment wholeheartedly.

Lord McKenzie of Luton: My Lords, I thank noble Lords for setting out their concerns. By this stage, we are all familiar with the arguments that have been made for and against the contracting-out of decision-making that could lead to sanctions under Clause 15. However, I do not think that enough attention has been paid to the potential benefits of moving decision-making of this kind closer to the organisations that deal with customers on a day-to-day basis. I do not believe that these benefits can be dismissed; they should get the measured consideration that has been the hallmark of the debate surrounding the Bill.
	Decision-makers make their best decisions when they have the proper, accurate and timely information needed. There should be no argument about that. There is a real desire among noble Lords and stakeholders that decision-making be improved and decisions be right first time. Locating decision-makers within provider organisations could make the process of information-gathering faster, easier and more accurate. Having two different organisations, one responsible for support and the other for conditionality, also weakens the link between the support that customers receive and their responsibility to engage with us.
	Responsibility is not an added extra to ESA that should be dealt with separately—far from it. It is an integral part of ESA. For sanctions to be a proper incentive, customers must realise that there is a fundamental connection between the work-related-activity component of their benefit and work-related activity. Of course, there are questions to be answered. How will it work in practice? How will we ensure that the quality of decision-making is upheld? How will we enable contractors to use this tool without abusing it? It is precisely those kinds of questions that need to be answered before we can contract out decision-making that would lead to sanctions. In the same way that we piloted Pathways to Work, learned from the pilots and built upon that approach, we would pilot the contracting-out of decision-making leading to sanctions under Clause 15, learn the lessons that the pilots taught us and build upon that.
	There are potentially a number of benefits of contracting out decision-making leading to sanctions. Given the strength of feeling on this issue and the questions yet to be answered, we acknowledge that we need do more work with stakeholders and providers in this area. We will not seek to retain the powers in the Bill to enable us to contract out decision-making that could lead to sanctions.

Lord Oakeshott of Seagrove Bay: My Lords, is the noble Lord accepting the amendment?

Lord McKenzie of Luton: No, my Lords, I am not. However, I will explain precisely how we intend to carry forward what I have said.
	Amendment No. 47 would have unintended consequences for a wide range of functions beyond decision-making that leads to sanctions. Contractors would not be able to revise or supersede a decision to waive work-focused interviews where it was appropriate—for example, if interviews were waived because a customer expected to start work but subsequently did not.
	Amendment No. 46 could still give scope for the contracting-out of decision-making that could lead to sanctions. This is because the functions of decisions leading to sanctions will be imposed under Clauses 10(1), 11(1) and 12(1) rather than under the clauses referred to in Amendment No. 46. As these amendments would not achieve their stated aim and would interfere more widely in Pathways and ESA operation, we cannot accept them. However, I will make a commitment to bring forward amendments at Third Reading to achieve the desired result of removing powers to contract out decision-making that will lead to sanctions.
	I therefore hope that the noble Lord will feel able to withdraw the amendment and return to this matter at Third Reading.

Lord Skelmersdale: My Lords, I am rather nonplussed, I must admit. I assume that when the Minister comes back at Third Reading his amendment will remove the powers under Clauses 10(1), 11(1) and 12(1). In other words, he will produce the right amendment to achieve what I was hoping to achieve with this one. There is no doubt that the contractors will have an integral part in advising the Secretary of State and his minions whether someone has fallen foul of the requirements of the contractors' activities as far as ESA is concerned. That is the right way to go. However, as I said earlier, it is also right that he who pays the piper calls the tune. I anticipate that that is exactly what is going to happen in the noble Lord's amendment at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 47 not moved.]
	Clause 19 [Relationship with statutory payments]:

Lord Taylor of Holbeach: moved Amendment No. 48:
	Clause 19, page 16, line 43, at end insert—
	"( ) Regulations may provide that—
	(a) an assessment is to be made to identify all statutory entitlements and allowances to which a claimant is entitled, (b) a claimant is to be notified of their statutory entitlements, and (c) a claimant is to be advised on how statutory entitlements may be claimed."

Lord Taylor of Holbeach: My Lords, I suspect that I am rather timid in proposing a quick and simple probing amendment after all that. I am hoping that the Minister will be able to assure us that the Government are taking concrete steps to improve the current system of informing potential claimant customers of benefits to which they may be eligible. We have heard from many lobby groups that merely providing a rack of leaflets at the local job centre is not effective. The benefit system is far too complicated and obscure for that.
	I was pleased to hear in Committee that the Government intend to update the scripts that are used at job centres to include information about where more benefit information on carer's allowance or disability living allowance can be found. Is this all they intend to do? What about other related benefits? Do the Government have any intention of undertaking any disability awareness training so that the staff at job centres are able to identify potential claimant customers more accurately and assist them to maximise their entitlement? The Minister has given us an assurance that they will continue to consult claimant customers and representative groups about ways to improve benefit awareness at every stage of the ESA system. I hope they will give full consideration to any suggestions that arise as a result. I beg to move.

Lord Addington: My Lords, Amendment No. 48 seems remarkably familiar. I have used similar arguments since this came out. Ensuring that people get the right information about what they are entitled to has been very important for a long time. I hope that the Government can use the opportunity to give us further clarification on how this is going to happen. I support the amendment.

Lord McKenzie of Luton: My Lords, let me see if I can give noble Lords the clarifications they wish in this area. The amendment seeks to create provisions which would allow regulations to specify that when people claim employment and support allowance an assessment is made of their other entitlements. They are then notified of any entitlements and advised how to claim them. It is only right that people should have full access to information and advice on the financial and other help available to them. The Department for Work and Pensions already provides extensive background information on the full range of benefits, statutory entitlements and how to go about claiming them. For example, where customers require quick or urgent advice they can contact their local office or call Jobcentre Plus Direct or their appropriate benefit delivery centre. Our wide range of literature is available in many locations and formats. For example, the Jobcentre Plus leaflet entitled A guide for disabled people, those with health conditions, and carers explains the support that is available to those people if they are unable to work, looking for work or not looking for work at the moment but may in the future. In addition, the customers home page of the Jobcentre Plus website signposts disabled customers to the specialist help available for disabled people; for example, Access to Work, Workstep or Remploy.
	We acknowledge that there are many challenges associated with producing customer information. We have made much progress in rationalising our leaflets and the information on our websites and increasing its accuracy and availability. We are moving in the right direction but recognise that there is more to do. As the implementation of ESA progresses we will continue working with all stakeholders to ensure that this information gets to the right people at the right time and in the right way.
	There is cross-government co-operation in this respect. The Disability and Carers Service is working with the Department of Health to improve the ways benefit advice about disability living allowance and attendance allowance can be delivered. This includes exploring the provision of benefit advice through the "information prescription" which the Department of Health will trial in England. We have also taken steps to improve the customer management system scripts. The department's officials responsible for the system are in touch with Macmillan so that there may be a real opportunity for Macmillan's aspirations for its service users to become a reality. I am sure noble Lords will agree that this is a positive move forward.
	Jobcentre Plus is fortunate in that it is staffed by dedicated and hard-working staff who already do all they can to provide information at the right time to all those who contact it for help and advice. I am, therefore, not convinced that the power to provide for a statutory duty would add anything to the requirement that we already place on Jobcentre Plus. Accordingly, I hope that I have provided the comfort that the noble Lord requires and that he feels able to withdraw the amendment.

Lord Kirkwood of Kirkhope: My Lords, before the Minister sits down I would like to intervene briefly in support of the amendment. This is a crucial amendment. I do not agree that putting it in the Bill and placing a statutory duty on the Government is nugatory and has no effect or is unnecessary. Psychologically, it is important that the personal advisers, who will come into play for the first time, have the ability to look at the whole picture, as well as some of the health-related and, I hope, biological, psychological and social measures behind some of these claimants and customers and—for the first time in 25 years in my certain experience and knowledge—have the ability to win the confidence of customers in a way that has never been done before.
	I have personal experience of this. In a previous incarnation—admittedly a long time ago—I acted as a CAB personal adviser in the town of Hawick in south-east Scotland. I saw streams of customers or clients coming across from the DHSS office, as it then was, and I would tell them exactly the same thing as the officials across the other side of the high street had done. They were much more prepared to accept it from me because they believed that I was someone who was acting in their best interests, broadly defined.
	If we get this right, personal advisers could play an extremely valuable role. One of the best ways to encourage people to come on down and talk sensibly and openly to personal advisers is the knowledge that someone sitting on the other side of the desk is going to do the best they can—become a personal friend and adviser and provide support, psychological and otherwise, in picking the customer's or client's way through the system. The amendment is a crucial part of enforcing that feeling of confidence that customers and clients will have.
	Uptake rates are a continual problem; people are denied entitlements that the system would provide for them if only they knew the route to ask. We miss a trick here if we do not accept responsibility. The amendment may not contain the right approach; perhaps its wording or suggested procedure is not right. I say to the Minister with all the conviction that I can muster that if he is somehow able to invest personal advisers with the ability to say, "I am able to help you across a wide area", people will come to them in a frame of mind that they would otherwise not have. In the Bill he is trying to change the psychology involved in this regard but he may be walking away from one of the best ways of getting assistance for the issue.
	I absolutely support the amendment. If it is a probing amendment, that is fine. I hope that the Minister will go away and think carefully about how to encourage people to talk to personal advisers; we should introduce a provision during the Bill's passage.

Lord McKenzie of Luton: My Lords, I agree entirely that we should do all we can to ensure that our customers are made fully aware of all the benefits and opportunities that the system provides for them through support and benefit. That is very important and absolutely right. I outlined in my initial response to the amendment the things that are going on; in particular, changing the script—for those who reach us on the telephone—with prompts to encourage people towards certain benefits when the conversation suggests that that might be appropriate. We notify customers when we reach benefit decisions and when we make payments; a full range of information is provided. We recognise that there is more to be done. I suggest that this does not simply involve personal advisers; the first work-focus interview, with the personal adviser, is a key opportunity to explain to people the journey on which they are about to embark and some of the benefits and opportunities around that; that is important. However, that is not generally the first point of contact, which is made when people ring up. That system, too, needs to provide information; that is why we are looking at scripts and working with stakeholders to get those right.
	All that the amendment says—this is why it does not achieve anything—is: "Regulations may provide that". In a sense, the department already has the power to do all that is contained in the provisions that are then listed in the amendment. It is not helpful for that to be expressed in those terms.
	We do not disagree about the importance of ensuring that people are appropriately and fully informed about entitlements and about what the system can provide; I simply do not think that the amendment takes us very far. I believe that it is a probing amendment in any event and hope that the noble Lord still feels able to withdraw it. I hope that we are agreed about where we should be on this issue.

Lord Taylor of Holbeach: My Lords, I thank the Minister for his response to the probing amendment. Also, the House should be grateful for the contribution of the noble Lord, Lord Kirkwood, who focused on what is essential to the Bill; that is—this is what makes it unique—the relationship between the personal adviser and the claimant customer. That is what gives the Bill its positive edge. I am very much reassured by the Minister's response that there is a determination to ensure that this relationship is one whereby the claimant customer will be properly and fully advised on ways in which they could take forward their proper statutory benefits along with the opportunity to explore Pathways to Work, which the Bill provides for. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Thomas of Winchester: moved Amendment No. 49:
	After Clause 21 , insert the following new Clause—
	"Prescription charges
	Persons for whom employment and support allowance (income-based or contribution-based) is their only household income and who satisfy the savings threshold for income-based employment and support allowance are exempt from prescription charges."

Baroness Thomas of Winchester: My Lords, the Minister is in such a generous mood that I have hopes for the amendment. We have tabled this amendment again, having reflected on the debate in Grand Committee and after receiving further evidence from our advisory groups.
	First, I should say that we are talking not about full passporting of all benefits for those on ESA but about free prescriptions. Free prescriptions are available for other benefit claimants, and it seems bizarre that they are not necessarily going to be available for all low income ESA claimants, who are, by definition, in poor health. I must reiterate what I said in Grand Committee, which is that a MORI- commissioned survey five years ago showed that as many as 750,000 people were failing to get their prescriptions dispensed because they could not afford the charge.
	It is worth taking a little time to examine what happens now. As things currently stand, those on the contributory strand of jobseeker's allowance move across, after six months, to the income support JSA, so this group can access free prescriptions that way, but there is nothing similar in this Bill for those on the contributory strand of ESA. In general, looking at all those entitled to free prescriptions, there are those aged 60 and over; those aged under 16, or under 19 and in full-time education; those receiving income support or the guarantee credit of pension credit, or income-based JSA; and some are receiving working tax credit or child tax credit.
	Another group that receives free prescriptions are pregnant women and those who have given birth in the past 12 months, regardless of their income, so there is a clear precedent for extending the exemption from prescription charges beyond those in receipt of income-based benefits. Is it not likely that ESA claimants will be just as much in need of an exemption from prescription costs—if not more so—than anyone in one of those categories? One very important question is whether or not the fact that claimants are unable to afford to pay for the prescriptions they need will be treated as having good cause in the event that they are unable to comply with the conditionality imposed on them. That question was not raised in Committee.
	What we are asking for is some adjustment to the initial application for ESA to incorporate a suitable income test, the outcome of which could be passed to the Department of Health, which administers the exemptions system. There is some precedent for such a system and information-sharing between government departments in the liaison between the HM Revenue and Customs and the Department of Health on exemptions for tax credit claimants.
	Does the Minister agree that this suggestion fits in with the Government's aspiration to improve their service to their customers, or claimants, by using technology to share information between government departments?
	In Grand Committee, the Minister spoke about the change to the system of pre-payment certificates from July this year, which is very welcome for those on low incomes. However, Citizens Advice client evidence suggests that awareness of both the pre-payment certificates and the low income scheme is poor. Some clients find out about the operation of these schemes only when they seek advice because they cannot afford their prescriptions or because they received a penalty for fraud as a result of claiming exemptions to which they wrongly believed they were entitled. The distinction in exemption entitlements between income-based and contributory-based benefits is often not obvious to claimants, especially as both may be paid at the same weekly rates. The amendment gives an opportunity to avoid carrying over into the new ESA regime the unfairness contained within the existing IB system by making all low-income ESA claimants exempt from prescription charges.
	Making sure that ESA claimants are able to access medication prescribed for them should be central to the Government's welfare reform agenda. The clear focus in ESA is to address people's health problems so that they can be encouraged back to work. Its introduction strengthens the case for tackling this problem to ensure that efforts to improve condition management are not undermined. I beg to move.

Lord Skelmersdale: My Lords, this subject has been covered more than once in previous stages of the Bill. I recall the Minister saying:
	"We expect the income-related strand of employment and support allowance to offer access to the same benefits that have already been discussed as income support currently does".—[Official Report, 1/3/07; col. GC 266.]
	If the Government can change the expectation to an affirmation that they will offer the same access to the same benefits as are available to people on income support, I am sure that the noble Baroness, Lady Thomas, will be more than happy to withdraw her amendment.

Baroness Morgan of Drefelin: My Lords, I thank the noble Baroness for tabling this amendment again and for giving us the opportunity to discuss the matter on Report.
	The amendment seeks to probe our intentions for passported benefits within ESA. The noble Baroness also asked about the comparison between those on the contributory elements of both ESA and jobseeker's allowance. As I said previously, we understand the importance of income-related benefits to our customers, both for the income they provide in and of themselves and because they often also allow the customer to qualify for other benefits.
	As I made clear in Committee, we expect to bring existing passporting rules into the income-related strand of employment and support allowance, allowing access to the same range of benefits as offered by income support. The range of support includes free prescriptions and remission from other NHS charges, such as optician and dental costs, benefits such as free school meals, school uniform grants and cold weather payments, milk tokens and vitamins for young children and expectant mothers. In addition, customers receiving the income-related strand of ESA will be passported on to the maximum level of housing benefit and council tax benefit. As noble Lords know, that can make a huge difference to the income of families, particularly those in greatest financial need.
	Customers receiving only contributory benefit are not currently passported automatically, as we discussed, because the schemes in question are targeted support meant for those most in need, and entitlement to contributory benefits is not based on household income. However, someone on a low income who is in receipt of incapacity benefit or, in the future, contributory ESA, may still qualify for additional help through the low-income scheme. Noble Lords will understand, therefore, that there is no financial disadvantage regarding prescription charges between contributory jobseeker's allowance and employment and support allowance, as those on low income will qualify for help whether passported or otherwise.
	We accept that this scheme requires additional forms to be completed and we recognise that that is an issue, but it provides valuable access to free prescriptions and is designed so that no one on a low income need be unable to afford prescriptions.
	Additionally, from 2004, people have been entitled to full remission of NHS charges on more generous terms. Previously, people were entitled to full help through this scheme only when their income was equal to, or less than, their statutory requirements. From 2004, people became entitled to full help if their income exceeded those requirements by up to 50 per cent of the prescription charge. This means that people whose income is only marginally above income support level are now entitled to full help.
	Again as I advised noble Lords during Committee, as part of their response to the report of the Health Select Committee on NHS charges, the Government undertook to explore the possibility of accessing free prescriptions without the need to make a separate low-income scheme claim—a significant point. This will be looked at as part of the overall review of prescription charges. The noble Baroness, Lady Thomas, highlighted the complexity of prescription charge exemption. Looking at the list that she took us through and at all the different exemptions, it is clear that a significant review needs to be undertaken, and the Department of Health is undertaking such a review. However, when doing this, we need to be mindful of getting the balance right. The challenge is to find a way of identifying those with low incomes and ensuring that our information is up to date as people's circumstances change without being overly bureaucratic or intrusive. The Government will report the outcome of this review by this summer.
	In addition, as I said in Committee, the Government have agreed that, to make it easier for customers to meet the cost of annual prescription pre-payment certificates, they will be available through monthly direct debits from July 2007. At the same time, four-month pre-payment certificates will be replaced by lower-cost three-month pre-payment certificates, something for which I know stakeholder organisations have been campaigning for many years.
	I just wanted to pick up on the point about sanctions. If a customer's state of health or his physical or mental condition prevented him fulfilling a particular requirement and if this was a result of not having a prescription medication, that could count as a good reason for not attending. There is no reason why someone on low income should be unable to obtain a prescription; that is what the low-income scheme is for.
	In the light of the reassurances that I have given, I hope that the noble Baroness will consider withdrawing her amendment. I appreciate that she is highlighting a very important and complex issue for people with significant health needs. I hope that, through the review of prescription charges, some of these issues can be further aired.

Baroness Thomas of Winchester: My Lords, I thank the Minister for that very full explanation. I should like to add two things. First, I gather that it is the Department of Health that issues the low income forms. I hope that it will ensure that the forms are as simple as possible, because that is one of the problems.

Baroness Morgan of Drefelin: My Lords, as I recall, that is precisely what the review is about, as well as simplifying the process and other matters. I hope that that helps the noble Baroness.

Baroness Thomas of Winchester: My Lords, the other matter, which takes us back to an earlier amendment, is that jobcentres must tell people about the low-income scheme, particularly those on the contributory strand, who may be only marginally better off than those on the income-based strand. They should be told that this is available so that everybody knows about the low-income scheme.
	Again, I am glad to welcome the review and I hope that there will be a report to Parliament so that we can see its result. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 2 [Employment and support allowance: supplementary provisions]:

Baroness Meacher: moved Amendment No. 50:
	Schedule 2 , page 55, line 30, at end insert—
	"Holding periods
	(1) Subject to sub-paragraph (2), regulations shall provide that where a person previously had limited capability for work and where no more than a prescribed period of time has elapsed, he shall be treated as having limited capability for work for the holding period.
	(2) Regulations shall provide that entitlement during the holding period shall be dependent upon the receipt of written confirmation of suitability for assessment by a prescribed health care professional.
	(3) The holding period shall commence with a person's application for ESA and cease at the end of the assessment period.
	(4) During the holding period, regulations shall provide that a condition which was satisfied in relation to the earlier period is to be treated for the purposes of this Part as satisfied in relation to the later period."

Baroness Meacher: My Lords, the purpose of the amendment is to clarify the procedures which would remove one of the most powerful disincentives for ESA claimants to strive to find a job. At present, the linking rules look helpful on paper but sadly do not work in practice.
	Under the current rules, if an IB claimant accepts a job but within a two-year period loses the job, if they wish to reclaim IB they must contact a call centre, which will forward a relatively short application form to the claimant. The form must be completed correctly—I believe, not surprisingly, that a lot of them are certainly not completed correctly—and returned to the jobcentre. The claimant will then be invited for interview and asked to bring with them a number of documents to prove identity and any change of circumstances. In reality, a claimant with a mental health problem who has just lost a job will not be in any kind of state of mind to organise themselves to complete the reclaim process effectively. Lots of delays and confusion can be expected before benefit is restored, if at all. The target time for completing the process for reclaiming IB, but not, I emphasise, housing benefit, is 18 working days from receipt of the completed application form. In reality, taking into account delays and errors, which may well be down to the claimant, two to three months can pass under the linking rules before benefits are restored.
	I mention housing benefit because until now the linking rules have not applied to that. I know from our front-line staff in East London and City Mental Health Trust that, for people with mental health problems, this often causes chaos and risk of eviction, which will be avoided only by intensive and highly time-consuming work on behalf of mental health staff.
	The amendment provides a solution to these problems. It would remove the fear experienced by any mentally ill person contemplating taking a job and relinquishing the safety net of benefit. Any claimant knows that they face stigma and uncertainty when taking a job, and if they then fail and lose the job, they will have intolerable uncertainty and lack of money before benefit is restored. The amendment provides for the situation where a person with a mental health problem takes a job and subsequently loses it. A letter from a responsible clinician certifying that the person was once again out of work and in need of benefits would trigger renewal of benefit payments immediately. Paragraph 4(1) of Schedule 2 states that a second period out of work within,
	"a prescribed length of time is to be treated for the purposes of this Part as a continuation of the earlier period".
	It is precisely that spirit that, I believe, supports the amendment. It makes clear that the usual safeguards against abuse under the linking rules should apply. However, these safeguards would be applied during an initial holding period while the new ESA is being paid. The restoration of benefit would thus not be delayed while these procedures were followed. Quite the opposite: benefit would be restored for a holding period of perhaps three months immediately. As benefit was restored a form would be sent to the claimant to confirm the date of leaving the job, efforts would be made to ensure that the form was completed and returned, an interview would be organised, and so forth. In other words, everything could continue just as it does now, but you would not have the intolerable delay before any money is paid while the processes are pursued—and the poor old claimant makes all sorts of mistakes involving a lot of delay.
	This reform could be introduced to apply only to a period of perhaps six months from the date of taking a job. The linking rules apply to a two-year period. From discussion with the Minister and officials, I understand that over a two-year period you could expect some considerable change of circumstances, which could make this whole process rather complicated. This would ensure that the individual circumstances are unlikely to have changed dramatically. Changes of circumstances between the original period of claim and the subsequent holding period could perhaps be ignored on the grounds that the period out of work was treated, as it says in the schedule,
	"as a continuation of the earlier period".
	That would be difficult to justify if the two periods were very far apart. I know that the Minister fully appreciates the problems that the amendment is designed to deal with, and I hope very much that he will feel able to support the amendment. I beg to move.

Baroness Thomas of Winchester: My Lords, we support the amendment. The linking rules are extremely welcome, particularly the relatively new 104-week linking rule, which I understood was introduced after much lobbying from disability groups and the intervention of the Social Exclusion Unit. However, as the noble Baroness, Lady Meacher, said, there is quite a time-lag between a person qualifying for the benefits they were on before working and the payments actually coming through. The amendment would ensure that benefit payments could be paid much more quickly so that the claimant did not get caught in a web of bureaucracy.
	A person who has been on ESA for quite a long time is more likely to plunge into the world of work if they know that, should their condition deteriorate, it will not take them long to return to benefits.

Lord McKenzie of Luton: My Lords, we believe that people with mental health problems and those with fluctuating conditions who move between benefits and work need to have their benefit position properly protected. I fully appreciate the concerns that noble Lords have raised about this important issue.
	The linking rules protect people receiving benefits because of incapacity for work—or, in the future, limited capability for work—who leave benefits and then find they need to return to it. The linking rules are designed to enable people to return to the same position on benefit as when they left it. The rules apply to incapacity benefit, income support, housing benefit and council-tax benefit, and they will also apply to ESA.
	Last October, in response to concerns about the complexity and the scope of the linking rules in incapacity benefits, we simplified and improved the rules in four ways. First, the long-term linking rule period for people who have been incapable of work for more than 196 days and who leave benefit for work or training was doubled from 52 weeks to 104 weeks. Secondly, work or training that starts within a month of the benefit ending counts for the purpose of this rule, instead of that which starts within one week, as was previously the case. Thirdly, we have removed the requirement for a customer to provide formal notice at the point they leave benefit to start work or training. Prior to last October it was possible that some people would not qualify for protection because of this notice requirement. Instead the information about work or training will be gathered when a new claim is made. Fourthly, customers returning to benefit now requalify for the long linking rule immediately. They no longer have to spend a further 28 weeks on benefit before using the long linking rule again.
	We believe that those significant improvements provide considerable reassurance to people making the transition from benefit to work or training, which is so important if we are to fulfil our aspirations for reducing the number of economically inactive people. I fully appreciate the noble Baroness's concerns about people with mental health problems having difficulty in coping with a return to benefit when a job does not work out, but a fully automatic system would not be appropriate. It is important to check that the customer's circumstances have not changed substantially so that we can make sure that they receive the correct amount of benefit. If we did not undertake these checks, it is possible that vulnerable people may be asked to live on levels of benefits below their proper entitlement.
	Under the existing system, when a person returns to benefit and the linking rules apply, no referral is made for a personal capability assessment until 13 weeks have elapsed. Benefit is awarded on the basis of a medical certificate from the GP, provided that all the usual conditions of entitlement are met. At that stage, further specialised information about a person's mental health, such as from a psychiatrist, would not be needed for a benefit award, though further information may be sought after 13 weeks as part of the normal referral process for a personal capability assessment. We intend to carry forward this part of the existing system to ESA, thereby making part of the amendment unnecessary. In addition, it is important to realise that the linking rules will return a customer to the same place within the benefit; for example, someone returning to benefit via the linking rules would not need to serve the assessment phase again, provided he had completed it when previously on benefit.
	Last October, we also made further improvements to the claims process for benefits and extended the rapid reclaim process that applies to income support and jobseeker's allowance to incapacity benefit. People claiming incapacity benefit are able to make their new claim on a shortened rapid reclaim form if they have claimed incapacity benefit within the past 12 weeks and there has not been any relevant change of circumstances since their last claim. We intend that this new process will be carried forward to employment and support allowance. In addition, we have arrangements in place for representatives to make claims on behalf of customers where a person is unable to look after his own affairs. This is particularly important for customers with mental health problems. Although improvements have been made, we cannot remove completely the requirement for people to provide a statement of their circumstances so that entitlement can be established accurately. This is important to us in our desire to reduce error and important to customers to ensure that they are not missing out on any potential entitlement. Finally, we are also improving the linking rule further by extending the existing short linking rule to 12 weeks for ESA customers.
	We believe the current arrangements strike a sensible balance, but we are conscious of the concerns expressed and the practical points raised, particularly by the noble Baroness, Lady Meacher. We continue to look at other ways of improving the claims process. I hope the noble Baroness feels able to withdraw her amendment.

Baroness Meacher: My Lords, I thank the Minister for his comments. It is regrettable that he did not address the consequences of the two to three months' delay before people can retrieve their benefits. That is what happens; therefore, there is an inevitable disincentive for people, particularly those with fluctuating disorders and severe mental health problems, to search for work with some kind of commitment. I am bitterly disappointed that he does not feel that the matter is sufficiently important in delivering the Government's welfare reform strategy to make this relatively minor adjustment so that the necessary checks could be undertaken after the benefit is restored.

Lord McKenzie of Luton: My Lords, the Government want this to work. That is why the linking rules are in place. We will continue to look at these things to see what further improvements may be possible. I do not see how we can move away from at least the requirement to make a claim, which is a key part of the benefit. However, I am not dismissive of the practical points that the noble Baroness raised, nor are my colleagues in the Government. We will continue to see what we can do to make sure these rules work effectively, which is what they were designed to do.

Baroness Meacher: My Lords, with those assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Morgan of Drefelin: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that Report begin again not before 8.35 pm.

Moved accordingly, and, on Question, Motion agreed to.

Income Tax Bill

Lord Davies of Oldham: My Lords, I beg to move that this Bill be now read a second time.
	The Bill rewrites the core provisions of our current income tax legislation. It has been produced by Her Majesty's Revenue and Customs tax law rewrite project, which is working to rewrite our direct tax legislation so that it is clearer and easier to use. I should explain to the House that the Bill has been certified as a money Bill. It was introduced into Parliament in another place at the beginning of December. Under the special procedures applying to these tax law rewrite Bills, the substantive debate on Second Reading was held in Committee. The Bill then passed to a Joint Committee where it was considered on 24 January. The Joint Committee, chaired by Kenneth Clarke MP, includes among its members the noble Lords, Lord Newton of Braintree, Lord Blackwell and Lord Goodhart, the noble and learned Lord, Lord Millett, and my noble friends Lady Cohen and Lord Haskel. I am grateful to them for their efforts in scrutinising the Bill. The Bill then passed back to the House of Commons to be debated at Third Reading and has now come to this House for its remaining stages, which the rules say can be taken in one day.
	This is the third rewrite Bill to venture into the realm of income tax. Once enacted, it will complete the project's work on income tax. In particular, the Bill deals with the basic provisions about the charge to income tax, including income tax rates, various reliefs and the calculation of tax liability.
	Before I say any more about the specifics of the Bill, it is perhaps worth putting it in context by explaining a little about the work of the tax law rewrite project. It was set up in 1996 under Kenneth Clarke, then the Chancellor of the Exchequer. It is a project to rewrite the UK direct tax code, the provisions of which have been enacted over the past 200 years. The principal aim of the project is that the rewritten legislation should be accepted by all the main users as clearer and easier to use. To this end, it proceeds through careful consultation and consensus, in particular through its consultative committee, whose members are drawn from the main representative bodies in the tax world and business. Its work is overseen by its steering committee, chaired by the noble Lord, Lord Newton of Braintree—I am pleased to see him in his place—whose members include parliamentarians from both Houses.
	This is the third income tax Bill, but the fourth Bill, to emerge from the project. The first Bill became the Capital Allowances Act 2001, the second became the Income Tax (Earnings and Pensions) Act 2003 and the third became the Income Tax (Trading and Other Income) Act 2005. Those Acts have all been warmly welcomed by tax professionals and other users.
	It is beyond the remit of the project to make any changes in the main tax policies, but it can encompass minor changes where they will improve the legislation. Examples of such changes include new provisions to clarify points in the existing legislation, repeal obsolete material and correct minor anomalies. While making the legislation more accessible, the project takes great care to preserve the effect of the present legislation, apart from those minor agreed changes. An important part of the role of the Joint Committee is to scrutinise such changes as are in the Bill to ensure that they are indeed minor.
	During the project's work on the Bill, 31 consultation papers and a draft Bill were published for formal public consultation. A response document summarising the comments made on the draft Bill and setting out how the project has taken account of them was issued last September. The consultative process is not limited to formal papers, and the project uses other ways to involve users of tax legislation and keep them informed—for example, through informal discussions with interested parties and through its website. The Joint Committee noted the widespread public scrutiny of the Bill as a whole and the minor changes in particular, which are flagged up very clearly in the consultation process. It satisfied itself that all of them are within the remit of the project.
	The Joint Committee also carefully considered the amendments to incorporate new material into the Bill about the accrued income scheme before agreeing that those amendments be made. In its report, the Joint Committee noted that, while substantive new material should normally be included in the Bill prior to introduction, there were exceptional circumstances in this case and the clauses had been subject to extensive consultation. The Joint Committee also gave particular attention to Clause 1029, which will confer on the Treasury, for a limited period, a power to undo changes in the law made by the Bill in order to restore the law to what it was before the Bill came into force. This is similar to the power to make consequential amendments included in the previous rewrite Bill, in that it allows amendments to be made to correct the Bill without having to use primary legislation. This new power will, in particular, enable inadvertent changes to be corrected without the need for recourse to a Finance Bill. An undertaking has been given in another place that orders will only be introduced under this power with the agreement of the project's committees.
	On the content and approach of the legislation, the charge to income tax has historically been broken down into a number of schedules. The project's first two income tax Acts—known as the ITEPA, the Income Tax (Earnings and Pensions) Act 2003, and the ITTOIA, the Income Tax (Trading and Other Income) Act 2005—abolished these schedules for income tax purposes and replaced them with income categories.
	This Bill completes the picture. First, it tackles the core provisions of income tax. It contains the rewritten legislation for the basic provisions about the charge to income tax, income tax rates, the calculation of income tax liability and personal reliefs. The Bill also contains the rewritten legislation for various specific reliefs including loss relief, the enterprise investment scheme, venture capital trusts, community investment tax relief, relief for interest paid, gift aid and gifts of assets to charities. Additionally, the Bill contains specific rules about settlements and trustees, deduction of tax at source, manufactured payments and repos, the accrued income scheme, tax avoidance and general income tax definitions.
	The provisions about the calculation of a person's income tax liability are a particular feature of the Bill. The opportunity has been taken to provide a much fuller presentation of how the various elements to be taken into account in arriving at a person's overall income tax liability fit together. This has been well received in consultation.
	Various techniques have been used in the Bill to make legislation clearer and more accessible. First and most important is the imposition of a coherent structure, the material being presented in a logical way with linked topics grouped together. The Bill also contains plenty of navigational aids for the reader, such as introductory scene-setting chapters and signposts to other relevant provisions. Other features of the rewrite process include shorter sentences, modern language, more consistent definitions and greater use of aids to the reader, such as formulae and method statements. All this combines to make the law more accessible, easier on the eye and altogether more user-friendly.
	The project continues to enjoy the support of the users of the legislation. The comments made by the representative bodies confirm that this latest Bill from the project has, indeed, been well received. The Institute of Chartered Accountants in England and Wales commented on the draft Bill, and can be taken as representative of users when it said,
	"we commend the Tax Law Rewrite team on having produced another excellent rewrite Bill".
	The Chartered Institute of Taxation, another representative body, said,
	"once again, we found that the draft provisions in the main",
	were "clearly drafted".
	To sum up, this is an immensely worthwhile project which modernises our current direct tax legislation, making it clearer and easier to use. It would be wrong of me to conclude without paying tribute to everyone who has taken part in this work, from the time of its initiation by Kenneth Clarke in 1996. We owe a particular debt to the noble and learned Lord, Lord Howe of Aberavon, for his long service as chairman of the steering committee, and to his successor in that role, the noble Lord, Lord Newton of Braintree. It can be fairly said that this is a matter where there is no party-political controversy of any kind.
	This Bill is another major milestone in the work of the project and completes its work on the rewrite of income tax. The Bill maintains the project's excellent work and its track record of improving existing legislation as it turns its attention to its next task, that of rewriting the legislation about corporation tax. I commend the Bill to the House.
	Moved, That the Bill be now read a Second time.—(Lord Davies of Oldham.)

Lord Newton of Braintree: My Lords, I certainly do not want to take any great amount of your Lordships' time, but I felt that I had to say something. As the Minister acknowledged twice, or perhaps three times, I am currently the chair of the Steering Committee for the project. If anyone is mystified and wants to say, "Why you?", or "Why me?", whichever is appropriate, they had better turn to others for an explanation. My noble and learned friend Lord Howe of Aberavon appeared to have decided that I was a good person to take it on from him. I understand that he managed to persuade the project and the Minister of that view; they ganged up on me, and I allowed my sense of inadequacy to be overwhelmed by these blandishments.
	I therefore agreed to take over as chairman of the Steering Committee—with some diffidence, given that this project had been born in the mind of my right honourable friend Kenneth Clarke, as a former Chancellor of the Exchequer, and carried forward by my noble and learned friend Lord Howe of Aberavon, who had been looking after it for the whole of its 10 previous years of life. At any rate, here I am, and pleased to be associated with—to endorse the Minister's words—a very worthwhile venture.
	I want to do little more, except to join in his tributes to various people. I have mentioned some of them, particularly my noble and learned friend Lord Howe of Aberavon, whose project this became over those 10 years. Alongside them, I want to express my thanks to the project team, some of whom might just be in earshot at the moment and to my colleagues on the Steering Committee; not least the noble Baroness, Lady Cohen of Pimlico, and a number of others who devote great diligence to studying complex and lengthy papers. They make an extremely important contribution to the project. My main purpose apart from that was simply to be here to support the Minister and to urge the House to let him have his Bill. It looks as if the House is in a fairly docile frame of mind, so I am optimistic that my plea will not fall on deaf ears. However, I would like to make two related points, which I hope are not out of order.
	First, this project, as the Minister indicated, has been going on a long time. It was not originally envisaged to last as long as it already has, and it has still not by any means completed its work. I say to some who have assisted with the project through consultation that I am conscious that, with the acceleration of the project, there have been mutterings about consultation overload. I want to assure them that all of us connected with the project are very aware of that, and will do everything possible to try to ensure that consultation takes place in a way that minimises rather than maximises the burdens and pressures on those whose co-operation we require.
	Secondly, because of some of the pressures on the Steering Committee and therefore the whole project, there is a tendency—not among the professional bodies, but in one or two quarters—to confuse simplifying the writing of complicated legislation with simplifying the legislation. One grumble that we pick up is, "You may have made the thing clearer, but it is still extremely complicated. Why doesn't somebody simplify it?". The Minister will understand if we say that this remark is directed at the Government and not the project, because our specific terms of reference are to simplify the writing of the legislation, however complicated, but not to simplify the legislation.
	The Minister and his colleagues ought to be aware that considerable anxiety remains outside that, despite the relative applause for the simplified drafting, somebody ought to be doing more about simplifying the legislation itself. Now, while I expect no great declaration from the Minister tonight, I hope that he might carry that little message from those of us who are at the coal face in this matter to his colleagues in the Treasury. Meanwhile, apart from thanking everyone, exuding good will and urging the House to accept the Bill, I have nothing else to say.

Lord Newby: My Lords, I hope that I can be sympathetic without being too docile. I congratulate the noble Lord, Lord Newton of Braintree, and his team on the tremendous amount of work that they have done on the Bill. It is a huge intellectual and administrative effort, and they certainly deserve all our thanks and congratulations. One of the interesting opportunities which the Bill gives people like me who do not normally look at tax legislation except the Finance Bill, is simply to flick through it. Some of it at least is extremely clear and comprehensible to the layman who in the past has found such legislation almost totally impenetrable, although I must say that I had difficulty with the clarity of the manufactured payments part of the Bill. No doubt it was there, but my mind was not up to the complexity.
	That brings me to my main point—the point on which the noble Lord, Lord Newton of Braintree, concluded. Given that we have Finance Bills of 400 or 500 pages every year, what we have here is not a complete job but a sort of Forth Bridge job in that no sooner has the team got through the raft of taxes than there is a huge accretion of new taxes. I had very much hoped that that message would get across.
	One of the things that very much frustrates me in my work in the Liberal Democrat tax working group is that everyone to whom one talks about taxation, whether in politics, in the City or in business, says that the tax system needs to be simplified. My plea to them is, "Well, tell me how you want it to be simplified". Very often they have no answer to that. However, one principle of simplification could save a considerable amount of the existing tax code—the adoption of a general anti-avoidance rule. We have raised this issue before in your Lordships' House and I do not intend to expand on it at any great length. However, if HMRC and the Chancellor could be persuaded to adopt such a policy, I am informed that it could probably enable us to reduce the tax code by more than 1,000 pages. That would be a major simplification, against which many other suggestions for simplification would look relatively small. I urge the Minister to have a gentle word with his colleagues in the Treasury and suggest to it that it should at the very least re-examine that principle. It did so earlier in the life of this Labour Government, but did not proceed with it.
	One of the joys of all the documentation accompanying the Bill is two volumes called "Table of Origins" and "Table of Destinations", which sound a little like a railway timetable. The table of destinations is, in a sense, a sad document, because it lists all the things that are being repealed. It would be helpful, if only to demonstrate what a valuable project this is, if all the repeals could be added up and the Minister and the Treasury could say, "As a result of this work, we have reduced the tax code by X pages". The noble Baroness, Lady Noakes, shakes her head; perhaps the effect has been to increase that tax code by X pages. If, however, the effect has been to reduce it by X pages, that would help people to realise the value of the project, and no doubt cheer them up in a minor way. That would be very helpful. With that minor caveat, I support the legislation.

Baroness Noakes: My Lords, I thank the Minister for introducing the Bill, and I state for the record that I am never knowingly described as docile. We welcome the Bill, as we have welcomed the earlier products from the tax law rewrite project. Anything that makes our tax code more comprehensible has to be welcomed. The Minister explained that the project was started by my right honourable friend Kenneth Clarke when he was Chancellor of the Exchequer in 1996, and I pay tribute to my right honourable friend not only for initiating the project but for sticking with it, because he now chairs the Joint Committee of both Houses on tax law rewrite Bills. I also pay tribute to all those who have laboured to produce and to scrutinise the Bill, and I must single out for special mention my noble friend Lord Newton of Braintree, who I am glad could be with us this evening and who chairs the steering group. I am sure the Minister will have noticed that there is something not quite right about this evening's proceedings on this rewrite Bill; that is, the absence of my noble and learned friend Lord Howe of Aberavon, who normally likes to join us on these occasions. He cannot be with us this evening, and I was grateful for the Minister's kind remarks about him. We will miss his wisdom and experience this evening.
	There has been little controversy about the Bill. Concerns were expressed at the wide-ranging nature of the Treasury's power in Clause 1029, but we accept the assurances given by the Minister in another place that the power will be used only with the involvement of the relevant committees. Concerns were also expressed at the very late addition of clauses on the accrued income provisions, but again we accept, as did the Joint Committee, that the exceptional nature of the process meant that this treatment was merited. Such little controversy about a Bill that runs to 1,035 clauses and four schedules is a tribute to the effective way in which the rewrite process is being run; but we should be under no illusions—I hope that the noble Lord, Lord Newby, will note this—about the length of our tax code. I believe it is very likely that, when the Bill becomes law, the tax code will have lengthened to the point where we might rival or possibly even overtake India for the dubious title of the country with the longest tax code. Perhaps the Minister will say whether, once the Bill is law, we will have the longest tax code. We were still 1,000 pages or so behind India before the Bill, but we might well have caught up.
	Of course, length is not the most important issue. The rewrite process has taught us that explaining our tax law in simple and direct terms often does not result in fewer words. My noble friend Lord Newton referred to that. The key issue is complexity. I do not know of any international league tables that explicitly calibrate complexity, but it is a fair bet that if there were, our tax code would be up there vying for the top slot. Let me take the example of the accrued income scheme, the rewrite of which was added late to the Bill. When the scheme was first introduced, which I recall, the broad idea behind it was not at all difficult to understand, but the legislation was so dense that only tax specialists really understood how it worked. Over the years, the scheme was modified by successive Finance Acts and became even more complicated. I am sure that I am not alone among taxpayers in having had the greatest difficulty in knowing whether I have unwittingly fallen foul of the rules of the accrued income scheme when I complete my tax return.
	When I saw that the rules had been rewritten, I looked at them again. Noble Lords will find them in Part 12 of the Bill. Sixty-seven clauses are spread over 30 pages. The rules may well be written in more accessible language, but I do not believe that it is any easier to grasp their practical application. This is but one example of highly complicated rules that remain beyond the comprehension of the vast majority of taxpayers, and we should not put up with that.
	Conservative Chancellors have always had an ambition to create simple tax law. At Third Reading in another place on 20 February 2007, my right honourable friend Mr Kenneth Clarke, said:
	"When I was Chancellor, I tried to follow a practice that I thought I had acquired from watching Lord Lawson of Blaby when he was Chancellor of the Exchequer. His principle was that taxation should be as simple as possible, with exemptions and exceptions as limited as possible ... while still raising the revenue that one needed".
	I am not sure that all Conservative Chancellors succeeded in their aim of simplicity—there was certainly a fair amount of difficult anti-avoidance legislation before 1997—but their hearts were, I think, in the right place. That is in stark contrast with the current Chancellor of the Exchequer, who has genuinely created additional complexity through a whole range of special reliefs and incentives that are then buttressed by anti-avoidance provisions of equal or greater length to stop those reliefs or incentives being used in the way that only the Chancellor knows they should be used or applied in the first instance. My right honourable friend Mr Kenneth Clarke continued:
	"I fear that the present Chancellor does not have the same instincts. He is a micro-manager, and he keeps introducing more complexity into the policies of taxation, which the rewrite project must then turn into plainer English".—[Official Report, Commons, 20/2/07; col. 221.]
	This draws out two issues. The first is the increasing complexity of our tax code. The second is that almost as soon as a bit of the tax code is rewritten, it is often replaced by something more complicated and expressed in terms which are less simple, and requiring a further rewrite in due course.
	Do the Government believe that they have made sufficient progress in drafting new tax legislation in the spirit and style of the rewrite project? If that is not happening, the project will become like painting the Forth Bridge. Worse still, if the project seems endless, it will not attract the people of the calibre that have been involved to date, in particular the bodies required to scrutinise the draft.
	The root of the problem is the Chancellor's approach because he does not seem to embrace simplicity as an aim in tax legislation. I have asked Ministers in this House many times if the Government are committed to achieving tax simplification. The response I have had from the Minister's predecessors is that complexity has to continue because of the constant need to do battle with those who seek to avoid tax. And we know from the announcement earlier this month as well as at the Pre-Budget Report that the upcoming Finance Bill will contain another large dose of anti-avoidance legislation. Will the Minister stick to the line that we need complexity because of tax avoidance or will the Treasury open its mind to the possibility of a new way forward?
	We believe that there is a different way. It requires a completely different mindset about the tax system. It would certainly require a self-denying ordinance on using tax as an instrument of economic micro-management. It may also require a different, purposive style of legislation and might also require—as the noble Lord, Lord Newby, pointed out this evening—a different approach to anti-avoidance; namely, a general anti-avoidance rule. There is no doubt that these are difficult issues but they are worthy of examination.
	My noble and learned friend Lord Howe has long campaigned for a sister project to the tax law rewrite project; namely, the tax structure review project. He has the backing of the Tax Law Review Committee, the Institute for Fiscal Studies, the Chartered Institute of Taxation and of the Institute of Chartered Accountants. The recent report by the Tax Reform Commission chaired by my noble friend Lord Forsyth of Drumlean recommended the creation of an office of tax simplification to sit alongside and extend the work of the tax law rewrite project.
	I do not underestimate the difficulty of such a task. The transition from our present body of tax law to one based on principles of simplicity is an awesome task. But I believe that it is in the interests of the UK economy for us to attempt to achieve it. In their submission to my noble friend's Tax Reform Commission, the accounting firm KPMG—in which, I remind noble Lords, I was a partner for many years—said that the increasing complexity and reducing certainty of the UK tax system was gradually making the UK a less competitive location for industry. We must not let our tax system, on top of our high tax rates and our increasingly aggressive tax administration, act as a drag on our competitiveness.
	I conclude by reiterating our thanks to all those involved with the rewrite project—those in Parliament, the Treasury and HMRC and those bodies which comment on the drafts. As the Minister said earlier, another rewrite Bill, this time on corporation tax, is already well advanced. I shall not say that I am looking forward to its arrival but I am certainly grateful to the rewrite team for its efforts.

Lord Davies of Oldham: My Lords, I am grateful to the noble Lords who have spoken in this debate. However, I chide the noble Lord, Lord Newton, on two areas in his short contribution. First, he is too modest by half. The reason why he is chairing the committee is, as we all know, his astute mind and his excellent chairmanship. We are pleased that he has taken up this position and we wish him well in it. Despite the misgivings of the noble Baroness, Lady Noakes, about the future of this work, I wish him well in it and I hope that he stays the course. His other misjudgment was to use the word "docile". Just because only the noble Baroness, Lady Noakes, and the noble Lord, Lord Newby, are here for the Opposition does not mean docility—far from it. A critical and constructive approach to legislation is what we always receive from those two noble Lords. The noble Lord, Lord Newton, will recognise this evening that, if there was a note of docility when he was speaking, that is because he engages the House in those terms. But, as I cheerfully expected, that would not last much beyond the duration of his immediate contribution—nor did it.
	I hear what the noble Lord, Lord Newton, says about all the appeals added up and the length of the Bill. There are 49 separate provisions contained within this piece of legislation. It is a significant piece of work to codify in those terms, which is why we are pleased with the progress that is being made. I recognise what the noble Lord, Lord Newby, indicates—that there are still parts of the legislation that are difficult to master. Modern life is quite complicated and aspects of the tax system will always test those of us who do not have particular qualifications in certain areas.
	The noble Baroness, Lady Noakes, enjoys the great advantage of being highly qualified, although that does not stop her from suggesting that we should rewrite a great deal of our legislation and adopt new strategies for the future. I am not sure that the Chancellor has given me the opportunity this evening to prejudge his Budget and to codify that within a limited and simple framework to solve all her problems, but I will faithfully relate back to him the desiderata that she has identified. Of course I agree with her that we should strive for tax simplification, which is why this project receives all-party support and produces legislation that enjoys the support of us all.
	However, some concepts of tax legislation are quite difficult. Even the Opposition, when they were in government, wanted to deal with certain aspects of tax avoidance and to identify tax loopholes, which often leads to complexity. There is no doubt that this is a natural corollary to some of that work. The greatest sin would be to leave the loophole, which would mean that someone was not meeting their full obligations to the nation as the law intended.
	I accept the noble Baroness's broad stricture that we should aim to make matters simpler. I do not think that any one Finance Bill will significantly increase the burden. The achievement of rewriting, which codifies past Finance Bills, should be recognised. I have no doubt that my right honourable friend's Budget in the other place will be testing in certain areas. It is likely to be a good deal more testing to values and judgment than to complexity or simplification, but I hear what the noble Baroness says about that.
	It is fair to ask whether simplification is an objective. Certainly, we want our taxation laws to be as clearly understood as possible in order to avoid the inadvertent actions that sometimes occur with regard to tax. It defeats the whole object of our attempt at self-assessment if we cannot keep taxation laws clear enough for the average citizen to cope confidently with a submission of their taxes without necessarily having recourse to professional advice, which we all know comes at a price and which, for the vast majority of our citizens, would never be meaningful in terms of value for money in their own situation.
	I have no doubt that future Finance Bills are bound to add to the burden of the noble Lord's committee, but Kenneth Clarke deserves the plaudits of us all for putting on the agenda since 1996 a clear realisation of the virtues of clarity and simplification in tax laws, of which the Chancellor of course takes account.
	I am not able to give the kind of assurances that the noble Baroness wants on this week's Statement, but I agree that we should share her broad objectives. I also countenance the obvious fact that it is easier to have a broad objective than it is to achieve in detail certain aspects of necessary tax changes in an increasingly complex society. The noble Baroness would be the first to understand that there are developments in the world of finance and wider aspects of society that throw up fresh problems almost year on year. It is not surprising, therefore, that the Finance Bill is complex. Nevertheless, I respect the point made by the noble Baroness and the noble Lord, Lord Newby, on simplification. The noble Lord, Lord Newton, attests by his very presence the important objective of the exercise. On that basis, I hope that it will be recognised that this work and Bill are a very important step forward. I commend the Bill to the House.
	On Question, Bill read a second time; Committee negatived.
	Then, Standing Order 47 having been dispensed with, Bill read a third time, and passed.

Lord Bassam of Brighton: My Lords, I beg to move that the House do now adjourn until 8.35 pm.

Moved accordingly, and, on Question, Motion agreed to.
	[The Sitting was suspended from 8.14 to 8.35 pm.]

Welfare Reform Bill

Consideration of amendments on Report resumed.
	Clause 25 [Parliamentary control]:

Lord Skelmersdale: moved Amendment No. 51:
	Clause 25, page 19, line 12, leave out paragraph (b) and insert—
	"( ) regulations under sections 8 to 14;"

Lord Skelmersdale: My Lords, the amendments in this group are a refinement of those that I tabled for Grand Committee. At that point, I believed that all the regulations flowing from Part 1 of the Bill should be subject to the affirmative procedure. The Minister pointed out that some 400 orders would be consequential on the enactment of the Bill, most but by no means all of them translating orders for incapacity benefit to fit the new regime of the employment and support allowance. Therefore, it would be a complete waste of parliamentary time to have all of them debated again and again as the situation changed. However, as I said at the beginning of today's proceedings, we are dealing with a wholly new benefit, which has not even been piloted very far as yet, although pilots have started—indeed, we were grateful for the report of the first year of the pilots that the Minister provided some weeks ago.
	Your Lordships' Delegated Powers and Regulatory Reform Committee did a pretty thorough job in recommending that certain of the orders should always be affirmative, and the Government have acquiesced, putting down amendments to cover those. However, the committee's report stated that it was "not inappropriate" for some of these orders to be affirmative the first time they appear. All the subsequent changes would be, as the Bill states, by regulations subject to the negative resolution procedure. While I have tried to incorporate some of the Minister's concerns about making all the Part 1 regulations subject to affirmative approval by this House and another place, I have not heard any suggestion that the second and subsequent orders would be of such a minimal nature that the negative resolution procedure would be appropriate.
	Naturally, I appreciate the Government's attempts to take into account the recommendations of the DPRRC and to make some of the more contentious regulations arising earlier in the Bill subject to the affirmative procedure. I hope that I can persuade the Government to do the same with the regulations that will arise from Clauses 8 to 14, which deal with the meat of the system: they cover how the assessments will be set up, what they will assess and what the results of those assessments will be. Although the Government have attempted to show us as much draft regulation as possible, it is impossible for them to provide us with a full picture, especially as the various pilot stages have yet to be completed.
	It is therefore inevitable that quite major changes will be made after the first regulations are made. For example, the pilot could well show that the original method of conducting assessments or a particular facet of them was not working as expected or indeed desired. Only last Thursday, the Minister and I debated a JSA order to give effect to the original policy intention of the pilot. It is therefore crucial that Parliament is given a chance to consider the final ESA system properly, not only when it is fully rolled out, but as it changes. I do not believe that a one-time only debate will do.
	Although I originally thought, as I said, that it would be right to make all the Part 1 regulations affirmative, I was, as I also said, gently steered off that by the Minister, who called my proposal "overkill". I agree. However, after Committee, the Bill team helpfully provided me with a table of what regulations each part of the Bill empowered. These clauses cover 15 separate regulations—hardly an enormous burden on parliamentary time given that they are closely associated in many cases and will surely be made and therefore debated together. The amendment would give the House an opportunity to have a fully informed debate on this new and unproven system as it changes—as it assuredly will. It will be of great value in providing further scrutiny of what your Lordships—even the Minister—will agree is a very complex Bill. I beg to move.

Lord McKenzie of Luton: My Lords, I thank the noble Lord for moving his amendment, which would make regulations under Clauses 8 through 14 subject to affirmative resolution. As he acknowledges, that is a restriction on the amendment that he moved in Committee.

Lord Skelmersdale: My Lords, it is an enormous restriction.

Lord McKenzie of Luton: Well, my Lords, we shall see quite how significant the restriction is. The scrutiny of legislation is a very important subject. However, I continue to disagree with the way forward that the noble Lord's amendment suggests.
	As noble Lords are aware, we have provided draft regulations to the House under Clauses 8, 9, 10, 11 and 13. The regulations under Clause 12 are subject to affirmative procedure on their first use; that is quite right, given that mandatory work-related activity will be a step beyond Pathways to Work-style conditionality. On other clauses in Part 1, we have accepted the recommendations of the Delegated Powers and Regulatory Reform Committee on the regulations that should be subject to affirmative procedure. On the clauses covered by the amendment, the committee did not make recommendations and specifically noted in its report the number of draft regulations that the Government have made available.
	I do not believe that it is necessary for regulations under Clauses 8 to 14 to be subject to affirmative resolution, given the steps that we have taken and the reassurances that we have given. The amendment goes further and would have all sets of regulations under the clauses now and forevermore subject to affirmative resolution. Small changes in regulations are necessary to ensure that policy is effective and works. When necessary, this can mean learning from experience and altering procedures as appropriate. Making all regulations subject to affirmative procedure would require debates in both Houses on regulations that, for example, made small changes to notification requirements or the test applied before deferring an interview. That could be counterproductive, in delaying changes that were needed to improve service to our customers.
	As for the number of regulations that the amendment would cover, we have 15 regulation-making powers, but that could result in something like 100 regulations in all. I am sure that even the noble Lord would accept that that would be a considerable burden on Parliament's time. It is always good fun to be in his company when debating these matters, but one can have too much of a good thing—and I suggest that the 100 regulations subject to an affirmative procedure that would result from this amendment would be a little more than a good thing.
	On that basis, I urge the noble Lord to withdraw his amendment. In doing so, I am very happy to sit with him and ask officials between now and Third Reading to take him in a bit more detail through what might be involved with the 100 regulations that he suggests should be affirmative. That might help to engender a broader understanding of the flavour of the regulations and the small movements that some of them might contain.

Lord Skelmersdale: My Lords, that offer is most gratefully accepted, but I am concerned about the Minister's use of the words "small changes", because with some of the regulations the changes are likely to be far from small; in fact, they might be quite extensive. Certainly, as the Minister says, the Government will learn from experience as this all beds down, which is the point of the five-yearly report that we agreed to a few hours ago. I am surprised to hear that there may be as many as 100 regulations in all, when I cited 15 that would, as I saw it, be involved in this change. As I said, I do not think that 15 regulations would be excessive, given that many would be debated together. Arguably, 100 regulations would be excessive, but I will have to ascertain how linked they happened to be and whether they would be likely to be debated together and available for debate on the same day, which is sometimes another factor in our consideration of regulations. I shall withdraw the amendment, but again reserve my right to raise it again at Third Reading should I feel it necessary. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 4 [Transition relating to Part 1]:

Lord McKenzie of Luton: moved Amendment No. 52:
	Schedule 4, page 74, line 23, leave out "an existing benefit" and insert "incapacity benefit, income support or severe disablement allowance"

Lord McKenzie of Luton: My Lords, I shall speak also to government Amendments Nos. 53 to 68 and government Amendments Nos. 69 to 80. For some reason, they have been degrouped on the amendment list, but they are part of a whole, and I propose to speak briefly to them all at the same time.
	This group of amendments is technical in nature and relates to Schedule 4. The amendments clarify the drafting to ensure that we have the power to migrate all groups that we may wish on to employment and support allowance. Their intention is to ensure that we have the power to migrate existing customers who can claim income support as carers or lone parents but who have also demonstrated incapacity for work. The amendments do not affect the policy position that we have taken previously on migration of existing customers. Existing customers will be migrated on to employment and support allowance over time and as resources allow, and will have their benefit levels protected, meaning that nobody will suffer a cash loss under the new allowances. The amendments ensure that the correct powers are in place to follow this policy. I beg to move.

Lord Skelmersdale: My Lords, as the Minister said, these are extremely technical amendments. Perhaps he would care to look at paragraph 11 of Schedule 4. I have done a little analysis of Amendments Nos. 71 to 78, which totally redraft the paragraph from the beginning of line 5 to the end of line 15. I note that the amendments would insert the words "an award of" three times, in sub-paragraphs (a), (b) and (c). Surely it would be more appropriate for Amendment No. 71 to alter line 5 to state,
	"'existing award' means an award of",
	followed by sub-paragraphs (a), (b) and (c). This would save six words on the statute book. We all try at all times to limit the statute book to the purposes for which the various Acts of Parliament are designed. I would have no complaint if the Minister decided to remove at Third Reading the whole of paragraph 11 and show us a Keeling schedule, which would make life a lot simpler.
	I agree with Amendments Nos. 52 to 56, but I am confused by Amendment No. 57. Why does income support suddenly appear? Amendment No. 58 relates to migration. I have covered the other amendments, except for Amendment No. 69. That amendment will leave out sub-paragraph (4), which defines "existing award", from paragraph 7 of Schedule 4. Why is this necessary?

Lord McKenzie of Luton: My Lords, I thank the noble Lord for his points. On his suggestions about the drafting of these amendments, in my short time in your Lordships' House, I have learnt to subject myself to the wisdom of parliamentary counsel. I will pass on those comments to see whether counsel wish to offer alternative drafting, but I would not hold my breath on that.
	The noble Lord was asking about Amendment No. 57, which provides that the claim for ESA be treated as a claim for incapacity benefit, income support or severe disablement allowance as part of the transition arrangements. I think that that touches on the point about where claims might come in at a point of transition, when there is an opportunity to migrate people on to ESA. That is the thrust of the amendment. However, rather than prevaricating on this matter, I ought to revert in more detail to the text.

Lord Skelmersdale: My Lords, before the Minister sits down, would he agree to write to me on those various points? I realise that I have rather bounced him. To an extent, I have rather bounced myself in these questions. However, these sorts of amendments often go through without any comment at all. That is a bad precedent to set and I am not going to set it.

Lord McKenzie of Luton: My Lords, the noble Lord has been assiduous in pursuing these details. He is quite right. I am sure that these technical amendments generally go through on the nod. I am happy to write to him in more detail and to expand on the focus of that amendment—or that part of the group of amendments. Would he specify again whether there are any further provisions, so that we can ensure that those are covered when we write to him?

Lord Skelmersdale: My Lords, my three questions were about Amendment No. 57, about paragraph 11 in total and about why leave out sub-paragraph (4) on page 76.

Lord McKenzie of Luton: My Lords, I undertake to write to the noble Lord on those.

On Question, amendment agreed to.

Lord McKenzie of Luton: moved Amendments Nos. 53 to 68:
	Schedule 4, page 74, line 31, leave out "an existing benefit" and insert "incapacity benefit or severe disablement allowance"
	Schedule 4, page 74, line 33, after "claim" insert "for incapacity benefit, income support or severe disablement allowance"
	Schedule 4, page 74, line 34, leave out from "day" to "to" in line 35
	Schedule 4, page 74, line 35, after "treated" insert "in prescribed circumstances"
	Schedule 4, page 75, line 2, leave out "an existing benefit" and insert "incapacity benefit, income support or severe disablement allowance"
	Schedule 4, page 75, line 6, leave out "benefit" and insert "award"
	Schedule 4, page 75, line 19, leave out from "existing" to "would" in line 22 and insert "award, and
	( ) had it continued to be possible to make an award of incapacity benefit, income support on grounds of incapacity for work, or severe disablement allowance, the award which would have been made to him ("the hypothetical award")"
	Schedule 4, page 75, line 27, at end insert "hypothetical"
	Schedule 4, page 75, line 28, leave out from "award" to end of line 29
	Schedule 4, page 75, line 32, leave out "an" and insert "the hypothetical"
	Schedule 4, page 75, line 32, leave out "of the existing benefit"
	Schedule 4, page 75, line 41, leave out "benefit" and insert "award"
	Schedule 4, page 75, line 42, leave out "benefit" and insert "award"
	Schedule 4, page 75, line 42, leave out "his award" and insert "it"
	Schedule 4, page 75, line 45, leave out from beginning to "would" in line 1 on page 76 and insert "and,
	( ) had it continued to be possible to make an award of incapacity benefit, income support on grounds of incapacity for work, or severe disablement allowance, the award which would have been made to him"
	Schedule 4, page 76, line 7, leave out "benefit" and insert "award"
	On Question, amendments agreed to.

Lord Low of Dalston: moved Amendment No. 68A:
	Schedule 4, page 76, line 13, leave out paragraph (b)

Lord Low of Dalston: My Lords, the amendments that we have just agreed to might be technical but I do not intend to let them go through on the nod. Although they have already gone through, I wish to address them none the less. In speaking to them, the Minister referred to the Government's intention to move people on to employment and support allowance with income protection. It is the question of protection that I wish to address.
	The Government have made it clear that they intend incapacity benefit and income support claimants to move over to employment and support allowance following its introduction in October 2008. I understand that they intend to begin this migration with the most recent claimants and those with dependent children because the quicker a claimant engages in work-related activity the more likely they are to move off benefit and into work. Helping parents off benefits and into work will also have a positive impact on the drive to reduce child poverty.
	This is a probing amendment designed to enable me to raise three issues on migration, which I would be grateful if the Minister would be kind enough to address. First, will there be a loss of income for claimants being migrated, as and when that occurs? Secondly, there is a real danger that many current incapacity benefit claimants will not meet the requirements of the new personal capability assessment and will fail to qualify for the employment and support allowance and therefore be moved on to JSA. Lastly, what will happen to residual, transitional protection for claimants of invalidity benefit and severe disablement allowance, which are both now abolished?
	First, on the loss of income for those migrating to the employment and support allowance, the Government have stated that claimants migrating across from incapacity benefit will have their income protected to ensure that they do not suffer any financial loss. Concerns have been raised with me by organisations outside this House that rates of employment and support allowance payable will be significantly lower than those currently paid through incapacity benefit or income support. Those shortfalls will arise because, in the first place, age, adult- and child-dependant additions, currently payable on top of the long-term rate of incapacity benefit, are to be abolished. Secondly, the average rate of incapacity benefit that has been paid is about £20 a week higher than the standard long-term rate, which is the level of protected income on which claimants will be moved across to employment and support allowance. The average rate of incapacity benefit in payment at August 2006 was £91.12 a week, against the standard long-term rate at that time of £70.05 a week. Those figures are drawn from DWP statistics.
	In addition, any protection of income levels when a claimant is migrated across will last only while that person remains eligible for ESA. It is the position of claimants losing entitlement to ESA under the new personal capability assessment, which is in the process of being revised or transformed, to which I will now turn. Under the new assessment procedure, the three-point descriptors are being removed, which will mean that existing incapacity benefit and income support claimants, especially those with physical health problems, will find it much more difficult to establish entitlement to benefit once they are migrated. Anyone migrated across to ESA who fails to establish entitlement under the new PCA will lose all income protection and will instead have to claim jobseeker's allowance at £57.45 a week. As well as the substantial loss of weekly income, those claimants will be denied the personalised and individualised support promised for ESA claimants.
	Claimants who are migrated across to ESA with income protection and who establish entitlement under the revised PCA will also suffer financially in the longer term, because the income protection effectively acts as a freeze on benefit income levels. On an annual uprating basis, any increase to the rates of ESA will be subtracted from the amount of income protection received, so the Government will effectively be giving with one hand and taking with the other. The overall income will remain unchanged. That will have two effects: first, a person will be driven more deeply into absolute as well as relative poverty, as he will have a static income over a five-year period, while prices, earnings and inflation will all continue to rise throughout the period; and, secondly, it will create complexity of administration and bureaucracy that will be difficult for both the claimant and the DWP to understand in any meaningful way.
	Finally I wish to consider the position of those who at present enjoy transitional income: former invalidity benefit and severe disablement allowance recipients who enjoy transitional protection. In addition to the issues to which I have drawn attention, a number of claimants have residual transitional protection in relation to old claims for invalidity benefit and severe disablement allowance, both now abolished. Invalidity benefit was abolished in 1995 and claimants were subsequently moved to incapacity benefit. Invalidity benefit claimants were given transitional protection, which means that their benefit payments are not subject to income tax; they have an entitlement to dependency additions and they do not have any deductions made with respect to private pensions.
	Severe disablement allowance was abolished in 2001 and SDA claimants were moved to incapacity benefit. SDA was paid to claimants who had not paid national insurance contributions but had established an 80 per cent level of disability. Those claimants were given transitional protection to enable them to continue to receive benefit even though they failed to meet the entitlement conditions for the new system. SDA has a number of different rules regarding payment rates, earnings rules, entitlement to premiums and so on. What do the Government intend will happen to those claimants, who were guaranteed protection when the respective benefits were abolished? I beg to move.

Lord Skelmersdale: My Lords, this amendment allows me to probe how ESA will affect claimants currently receiving benefits other than incapacity benefit. We have already spoken a little about carers, and the Minister was able to give us some good news on that. My concern now is lone parents. Lone parents who receive income support, with or without a disability premium, are not subject to any conditionality. They are not expected to move towards work readiness, but instead are given the support necessary to be full-time parents.
	However, that does not appear to be the case under ESA. We have heard of no exemptions that will apply to lone parents in the work-related group. Presumably that means that a lone parent with a young child will be expected to engage in work-related activities that under other benefits systems would not be required. The options available, therefore, will again presumably be to move on to the higher level of benefit at which we have been assured ESA will be set or to remain on a lower level of benefit but be free from conditionality. Can the Minister confirm whether that will be the case, and, if so, can he reassure us that the decision-maker will be sympathetic to the non-health-related requirements that such a situation may put on a claimant? Will a failure to find adequate childcare be considered a good cause to miss a work-related activity?
	As far as I am aware, the draft guidance makes no mention of that sort of situation. It is most important that we hear how the Minister intends it to work. I therefore congratulate the noble Lord, Lord Low, on producing this amendment, which has enabled me to tack on a little extra to what was originally intended.

Lord McKenzie of Luton: My Lords, I thank the noble Lord, Lord Low, for giving us a chance to talk about these important issues and for giving the noble Lord, Lord Skelmersdale, a chance to raise some items in an amendment that he either has not moved or has yet to move. The amendment to Schedule 4 would remove the power to terminate the existing benefit of customers migrating to ESA in particular circumstances. I understand that the thrust of this is as a probing amendment, so that the noble Lord can get the answers that he seeks to the points raised.
	I would like to respond to the noble Lord's specific questions around transitional protection. As we have said, all existing customers will have their cash level of benefit protected, provided that they continue to meet the entitlement conditions to the employment and support allowance. That applies to any customer on existing incapacity benefits, whether incapacity benefit, severe disablement allowance or income support paid on the grounds of disability or incapacity, and whatever their original route on to these benefits, such as former invalidity benefit customers.
	The noble Lord also asked about those existing customers who could fail to satisfy the new PCA. We are obviously still reviewing and testing the new PCA. Once this has finished we will be in a better position to say what the most appropriate stage to introduce it for existing customers is. We expect that it will be at the first PCA review following migration on to ESA. The new PCA has been designed to assess whether a person has a limited capability for work, which is a condition of entitlement to ESA for all new and existing customers. People who do not satisfy the test will therefore not be entitled to ESA. We believe that this is right and proper. That is because the new PCA has been designed by medical experts to accurately assess people's health conditions. It would be unfair for existing customers not to be subject to the same conditions of entitlement as everyone else.
	This amendment to Schedule 4 relates to our powers around migration of existing customers to employment and support allowance. As we have shown in the amendments already debated, we have been considering Schedule 4 very closely to ensure that we have the appropriate powers to successfully achieve our aims for the migration of existing customers over time, and as resources allow. The reason for this is that the migration of existing customers is a large and complex undertaking. Making sure that the new process is bedded down beforehand will ensure that the migration is as smooth as possible and reduce the risks around such a large project. We wish to learn from our operational experience here.
	Schedule 4 is designed so that we can respond effectively to changing circumstances—for example, learning from operational experience in the period of transition for existing customers following the introduction of employment and support allowance. Removing powers in Schedule 4 removes our ability to adapt to circumstances that cannot be foreseen. It would not be appropriate for us to remove this power and risk being unable to respond to changing circumstances.
	The noble Lord, Lord Skelmersdale, asked whether lone parents would be required to attend work-focused interviews as an ESA customer. The answer is yes, if they were an ESA customer. However, their caring responsibilities will be taken into account by personal advisers when they arrange interviews. They will be able to defer interviews if the deferral test is satisfied. I stress that some lone parents will continue to be able to choose whether they remain on income support. If their only route is incapacity, ESA would be the route available to them. If they wish to access income support as lone parents. they also have that choice. They can make a judgment as to the value of the benefits and the conditionality, and the support that is offered by the two streams.
	I reiterate that to the noble Lord, Lord Low. Not unreasonably, his questions focused on levels of benefit, but we should recognise that the new system is one which provides significant support for people which was not there before. We have to look at the balance of the package. That support seeks to enable people to move into work or closer to work, to eventually meet their aspirations as individuals. Those aspirations have been denied and neglected for too long. That is what the new system is about. You have to look at the balance of the allowances together with the support that will come with the new ESA regime.
	I hope that that has dealt with the questions from the noble Lord, Lord Low, but I will be happy to answer further if he feels that I have missed some points.

Lord Low of Dalston: My Lords, that is encouraging and reassuring. I draw particular comfort in relation to my first and third questions from the Minister's assurance that people will be migrated on a protected income equivalent to their existing cash benefit. The sting in the tail came when he said, "provided that they qualify for ESA", although there was further assurance when he said that the assessment of whether they continued to qualify for ESA would come at the first review after migration. I understood that to mean that there would be migration on existing cash benefit, which would be subject to review at a later stage. These are technical matters, so I will reserve judgment until tomorrow, when I have studied carefully all the Minister's words. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McKenzie of Luton: moved Amendments Nos. 69 to 80:
	Schedule 4 , page 76, line 38, leave out sub-paragraph (4)
	Schedule 4 , page 77, line 44, leave out "under section 68 of that Act"
	Schedule 4 , page 78, line 5, leave out "benefit" and insert "award""
	Schedule 4 , page 78, line 6, at beginning insert "an award of"
	Schedule 4 , page 78, line 6, leave out from "benefit" to end of line 7
	Schedule 4 , page 78, line 8, at beginning insert "an award of"
	Schedule 4 , page 78, line 8, leave out "under section 68 of that Act"
	Schedule 4 , page 78, line 10, at beginning insert "an award of"
	Schedule 4 , page 78, line 10, leave out from "support" to beginning of line 11 and insert "made to a person to whom regulation 6(4)(a) or 13(2)(b) or (bb) of, or"
	Schedule 4 , page 78, line 11, leave out "8,"
	Schedule 4 , page 78, line 13, leave out from "1987/1967)" to end of line 15 and insert "(persons incapable of work or disabled) applies;"
	Schedule 4 , page 78, line 15, at end insert—
	""incapacity benefit" (except in paragraph 10(a)) means—
	(a) incapacity benefit under section 30A, 40 or 41 of the Contributions and Benefits Act, (b) long-term incapacity benefit under regulation 11(4) of the Social Security (Incapacity Benefit) (Transitional) Regulations 1995 (S.I. 1995/310) (former sickness benefit), and (c) invalidity benefit which has effect by virtue of regulation 17(1) of those regulations as if it were long-term incapacity benefit;
	"income support" means income support under section 124 of the Contributions and Benefits Act;
	"severe disablement allowance" means severe disablement allowance under section 68 of that Act (as it has effect by virtue of article 4 of the Welfare Reform and Pensions Act 1999 (Commencement No. 9, and Transitional and Savings Provisions) Order 2000 (S.I. 2000/2958) (C. 89));"
	On Question, amendments agreed to.
	Clause 29 [Local housing allowance]:

Lord Best: moved Amendment No. 81:
	Clause 29 , page 20, line 21, at end insert—
	"( ) The appropriate maximum housing benefit shall only vary for those aged under 21."

Lord Best: My Lords, this amendment seeks to reduce youth homelessness, remove disincentives for young people to leave hostels and supported housing and to get jobs, and to enable vulnerable young people to obtain and retain somewhere to live. It would achieve those results by moderating the impact of the controversial single room rent, in future to be called the shared room rate, which limits the amount of housing benefit for those under 25 and creates a shortfall between what a tenant must pay in rent and the benefit they receive.
	The Government's overhaul of the housing benefit system, with the introduction of local housing allowances after proper evaluation of its Pathfinders, is very welcome but, in respect of younger people, the arrangements continue to be flawed. I hope to demonstrate that the Government's insistence to date on retaining the highly problematic shared room rate is based on a misunderstanding of the ways in which the private rented sector is now working.
	The amendment's progress has exemplified very well the revising role of this Chamber. Noble Lords have brought their knowledge and presented expert evidence from concerned organisations outside this House—in this case, Shelter, Citizens Advice, the Scottish Council for Single Homeless, the YMCA, Centrepoint, the Foyer Federation, the British Property Federation and others. The amendment also takes account of discussions in the other place and represents a compromise from the amendment proposed there.
	After the Committee stage provided the opportunity for a detailed discussion with a powerful speech from the noble Earl, Lord Listowel, and support from the noble Lord, Lord Oakeshott, and others, and after a helpful meeting with the Minister, I am returning to the issue with some hope of persuading him that it would be entirely sensible for the Government to take this amendment on board. I am encouraged to be optimistic by hints from the relevant government department—the Department for Communities and Local Government—which is responsible for homelessness policy. Earlier this month, that department published its policy briefing, Tackling Youth Homelessness. This draws attention to the problems created by the single room rent and concludes:
	"The Government is currently looking at this issue in the context of the Welfare Reform Bill".
	In the hope that the Department for Work and Pensions may be able to assist the Department for Communities and Local Government on this, perhaps I could spell out the reasons why I believe that the objections to this amendment are unfounded. It is said that if housing benefit covered the rent for a self-contained flat, those under 25 would reject shared accommodation and go for the more expensive option of their own flat. This would not only cost the state more but would put the individual deeper into the poverty trap, with a level of benefit that they could not match if they got a job. Moreover, it would mean that those on benefit were enjoying higher housing standards than most young people in work, the majority of whom are in shared accommodation.
	This analysis misunderstands the realities of the housing market. It is possible for someone on housing benefit to obtain shared accommodation only if landlords let this form of housing to housing benefit claimants. In some areas, there is no tradition of shared lettings—for example, in parts of Scotland and in many rural areas—so such accommodation simply does not exist. Elsewhere, where there are such lettings, these are seldom available to those on benefit. In a recent Shelter survey of landlords in Brighton, only 15 per cent were willing to let to anyone on housing benefit, let alone to those under the age of 25. In most places where landlords are letting shared housing to a group of young people, there are plenty of students and young professionals needing accommodation, reflecting the decline in the number of first-time buyers in today's overheated market.
	As a father of four young people who have all occupied shared accommodation in the private rented sector in four different places, both while at and after leaving university, I am very familiar with this market. Landlords like these tenants because parents such as me can be required to act as guarantors of the rent and will often help with a deposit and rent in advance. By contrast, landlords do not want the risky prospect of someone on housing benefit, particularly if that very low income tenant faces a shortfall between his rent and his benefit. Many landlords blatantly declare, "No DSS"— "No DWP" has not yet caught on—while the others are very likely to deploy the same policy without announcing it. There are other factors relating to the supply of shared housing for benefit claimants.
	Becoming part of a group of flat-sharers is natural and easy for my children and their friends. It is utterly different for the lone individual—someone leaving prison, leaving a violent partner or leaving specialist accommodation. Where an existing group of tenants is looking for a fellow housemate or sharer, the Shelter survey shows that only 7 per cent would ever consider, let alone accept, a housing benefit claimant to join them.
	Meanwhile, there have been big changes in the private rented sector over recent years, as research at York University has shown. The number of lettings in the old HMOs—houses in multiple occupation—has declined; many have been converted into self-contained flats. The Housing Act 2004 is now beginning to bite with its requirements for higher health and safety standards for HMOs, so the current decline is likely to accelerate. Conversely, there has been an explosion in the development of small flats through the phenomenal growth of the buy-to-let market. Saturation has been reached in some towns and cities, with small self-contained flats standing empty but beyond the reach of the under-25 year-olds, however great their needs, because of the shared room rate restriction.
	Do the statistics confirm the dearth of available shared accommodation for those on housing benefit? The answer is a resounding "yes". After the introduction of the single room rent a decade ago, the pressure to go into shared housing would lead one to expect a rise in the numbers moving into this kind of accommodation, but the facts show the exact opposite. Numbers have fallen dramatically from 33,000 people in 1997 to about 12,000 today. In part, as the noble Lord, Lord McKenzie, suggested, this may reflect the fall in the number of unemployed young people, but the fall in shared lettings to housing benefit claimants also comes at a time of increased homelessness, which strongly suggests that those at the bottom of the economic ladder simply cannot find any shared housing for which they can obtain the requisite housing benefit.
	Helpfully, the definition used for the new shared room rate for the local housing allowance is broader than for the single room rent in the past, but the DWP's research in the local housing allowance Pathfinder areas shows that, in fact, this well intended change has not made any difference. While there are self-contained flats with the level of housing benefit capped in the new scheme at the median, preventing any extravagance by tenants, shared housing, however it is defined, is not there for claimants to find.
	What about those who are already in a flat, paying their own way, who lose their job? Because of the shared-room rate, they will be expected to downsize into shared housing while they seek a new job. Since we know that the chances of finding such housing are remote, they will probably have to stay where they are and face shortfalls in their rent, which will virtually halve their income from jobseeker's allowance. This, of course, is a recipe for arrears, eviction, then homelessness. The chances of getting back into work are dramatically reduced by this unreasonable and unrealistic benefit restriction.
	What would it cost to sort this out? The Government accept that £20 million is about right for abolishing the single-room rent, provided the change does not increase demand. Out of a total budget for housing benefit of more than £12 billion, this figure is not too significant. However, Amendment No. 81 recognises that the Government do not want to go the whole way yet in removing the limitation entirely, so this amendment goes for a compromise by confining the change to those who are aged 21 or over. The Minister agrees that this reduces the headline figure to £10 million, but he argues that 21 is an arbitrary age.
	There are logical grounds for using 21 as the age when the position might change for claimants. The minimum wage goes up at age 22, and at present the single-room rent itself uses 21 as a cut-off for a special exemption that allows those leaving care to go into self-contained housing. Care leavers would not lose this entitlement after age 21 if the amendment were accepted. I would add that using the half-way house of age 21 would limit the Government's exposure to the risk of higher costs. It allows the ground to be tested before moving on to complete abolition of this restriction on benefit if the results are positive.
	Even if the change costs more than the £21 million estimate, account must be taken of the savings and benefits as well. Leave on one side the relief of homelessness and an end to the miseries of sofa surfing, which makes getting a job so difficult, purely considering the cost-benefit equation, the amendment would have some significant offsetting gains. Currently the inability of young people to move out of specialist housing, hostels and supported accommodation means they unwillingly engage in bed-blocking—taking up places, which others desperately need when they are ready to move out. As the YMCA has explained to us, it costs £350 per week to retain people in housing with specialist support. The cost to the state of covering in full a rent of, say, £100 per week, would be far, far less. By enabling one person who is ready for independence to move on, the providers of supported housing can take in one more homeless single person to go through the process of support and training. This problem of expensive bed-blocking is affecting many of the organisations taking in homeless young people. The amendment would have the very great value of removing this major barrier to preventing those under 25 moving onward and upward.
	I apologise at this late hour for laying out my case in some detail. I tried to marshal the arguments that will lead at last to a reform that will change the lives of many thousands of young people unable to secure a place to live. I know that it is late, but unless the Minister feels able to give some hope of movement on this one, I shall test the opinion of the House. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, what a powerful case that was. I have little to add to it. We debated this at some length in Grand Committee, and the noble Lord has drawn to considerable extent, as I would have done in my speech, on the Citizens Advice and Shelter briefing. We also very much welcome the support of the other organisations, some of which I mentioned in Grand Committee. The best estimate is that this would cost £10 million a year. That is a very modest sum to rectify what Tony Blair, John Prescott and John Hutton, among others, agreed was an injustice before they came to power.
	I shall probe the Minister in a little more detail on the point made by the noble Lord, Lord Best. In the past few days, the Department for Communities and Local Government—D-CLoG, as it is called—has published a policy briefing that states:
	"The Government is currently looking at this issue in the context of the Welfare Reform Bill".
	What does that mean? We did not see a hint of concession in Committee. Is the DWP looking at it by putting a telescope to its blind eye? If it is raising false hopes by this, that would be worse than not raising them at all. I shall leave it there, but I encourage the noble Lord, Lord Best, to have the courage of his convictions.

Baroness Hollis of Heigham: My Lords, this has been a problem for many years. We have made some movement on the shared room rent philosophy over the years, but there is a problem of supply and demand. We have all had hundreds of cases reported to us of young people who have to top-slice their income support or JSA, let alone their disability benefits, to be able to afford accommodation that is not fully covered by housing benefit. There is undeniably a problem.
	I have two difficulties with the solution proposed by the noble Lord, Lord Best, which is to bring the age for going on to housing benefit support, or the new housing allowance support, for self-contained accommodation down from 25 to 21. First, there is a problem of work incentive, partly because housing benefit and its tapers are the elephant in the room on all welfare reform policies by virtue of the very steep tapering effect. This is not particularly germane to the argument made by the noble Lord, Lord Best, but we know that where council estates have gone over to being housing associations on the grounds that in housing associations people are in work, the people who are transferred on housing benefit remain out of the labour market because it is so expensive for people on the minimum wage to leapfrog into making work pay. I would not like to attach a figure to that problem.
	Secondly, there is the big-ticket number. The noble Lord, Lord Best, said that the cost of providing for those over 21 to go into self-contained accommodation would be £10 million. My difficulty is that for a lot of social security there is a fulcrum at 25. IS is set at a higher rate for those aged 25 and over, as is JSA. If one were to bring the fulcrum for housing benefit down from 25 to 21, it would be difficult not to argue that IS and JSA rates should follow; otherwise, there would be major disjunctions between rent and income levels and whether a claimant was supposed to be in an independent household. I do not have a clue what the figure would be, but I suspect it would be around £200 million or £400 million. I am guessing because I have done no work on that estimate, but I suspect it would be a big-ticket number to bring the read-across benefits down to the same fulcrum.
	Having said that, I do not think any of us would feel comfortable walking away from this amendment, so I shall press my noble friend on the discretionary housing payments scheme. It has existed for a number of years and is a central government grant to local authorities to allow them to top up people's housing benefit and council tax for a good reason, such as because they are vulnerable, pregnant or have a very large family. Very many of the young people to whom the noble Lord, Lord Best, referred ought to count as vulnerable and to be eligible for such a fund. There is no reason why that should not be the case since, as I say, some local authorities spend all their money and some spend only 10 per cent of it. It is completely random and most people do not even know about it.
	I do not know whether the noble Lord, Lord Best, and others might feel that this is a reasonable way forward but, as we publicise the new local housing allowance scheme, could we ensure that all the literature makes reference to the discretionary housing payments scheme for those who may be considered vulnerable and that local authorities are circularised with this? Could my noble friend review the adequacy of the fund in the light of that? I cannot remember how much it was; while I have a feeling that it was about £25 million, it could well have gone up by now. That might be a way forward, giving a tailored help to those who need it without it becoming a big-ticket item for the whole field of social security.
	We have a real problem, but the solution that the noble Lord, Lord Best, suggested is possibly too big for this amendment, given the implications both for work incentives and the social security budget. I believe that there is another way of dealing with it, so could my noble friend help us on that?

Lord Oakeshott of Seagrove Bay: My Lords, the noble Baroness was probably not in Grand Committee when we discussed this exact point. The problem was that this benefit runs out in many areas well before the end of the year. Unless more money is put into it, I do not believe it will be a solution. Perhaps the noble Baroness would comment on that.

Baroness Hollis of Heigham: My Lords, I entirely accept that some local authorities will quickly spend over 100 per cent; others underspend. Yet through this cost-limited and cash-constrained vehicle the local authorities in which there is need could be targeted, as it is known where the need is. The problem could be redressed in that way.

The Earl of Listowel: My Lords, I strongly support my noble friend's amendment. It can be difficult for a young person to find a home. Let us take for example a typical group of young people from Centrepoint. A 17 year-old tells me that when she first moved out of home she moved into a bed and breakfast in Earl's Court. There was no lock on her door, and a man in his 40s kept hanging around immediately outside it. An 18 year-old tells me that he was placed in a bed and breakfast after leaving custody. No support was offered and he soon found himself on the street.
	We are discussing over-21s now, yet when the Centrepoints, YMCAs and foyers cannot find move-on accommodation for their older young people then they cannot offer support to their younger ones. They are silted up, as the noble Lord, Lord Best, said. The YMCA states that it cannot find move-on accommodation for 35 per cent of its young people.
	I do not wish to patronise young people in their early 20s; three-quarters of those in employment share with other people. Some of those currently out of work will find it difficult to share. For many, that will be due to shortage of supply, while for others it will perhaps be due to a poor upbringing that leaves them ill equipped to co-operate with others. Of those who find a flat, many will have difficulty managing their money. The single room rent will exacerbate those problems; the young person's tenancy may collapse, and they may be crushed by having failed in something in which they had so deeply invested themselves.
	Critically, the DWP's own research report No. 243, Research into the Single Room Rent Regulations, published in 2005, highlighted:
	"The restrictions that the SRR places on young claimants' ability to access private rented housing is preventing many from finding any private rented sector accommodation within their means. This, combined with the widely reported reluctance of many landlords to let to young people, appears to have resulted in a situation where many young people enter informal lettings or end up using 'friends' floors'".
	The noble Lord, Lord Skelmersdale, made that exact point at Second Reading and it has been made again this evening.
	We often do a poor job in this country of nurturing our children. The behaviour of some of them leaves our rate of child custody high above those of our neighbours. This February, we have the highest recorded number of children in custody of any February. I strongly support this amendment, which would also benefit young people in care whose exemption runs out at age 22. I am particularly keen to be reassured that the Department for Work and Pensions and the Department for Communities and Local Government are co-operating closely on enabling young people to gain a secure home base so that they can find and sustain work and become fully independent adults. Will the Minister consider meeting the noble Baroness, Lady Andrews, his opposite number from the Department for Communities and Local Government, soon to discuss this matter? Were it helpful, I am sure that my noble friend and I would be glad to attend such a meeting. I strongly support the amendment, and I hope that the Minister will accept it.

Lord Northbourne: My Lords, I support the Government in wanting to save the taxpayer money. Indeed, I also support them in wanting to reduce young people's dependence on the state. However, I also support the amendment because, on the evidence, the single room rent, or whatever it is called now, is simply not working. It is also damaging young people, particularly vulnerable and excluded young people. The poor socialisation of young people in this country today is covered by the recent UNICEF report on the well-being of children in rich countries. It cannot be a matter of pride for any of us that this country comes 21st out of 21 European countries which the report looked into. I know that that report has defects, but its findings are confirmed by recent reports by the IPPR and others that have come out in the past two or three years.
	Housing is a key factor in the socialisation of young people, particularly the disadvantaged and excluded. Such young people need help, not additional problems. For that reason, I support the amendment.

Lord McKenzie of Luton: My Lords, the noble Lord, Lord Best, has no need to apologise for tabling an amendment at this hour, particularly as he spoke on the matter with lots of knowledge and clear commitment. As has been acknowledged, the amendment is something of a compromise between the current rates and the complete abolition of the single room rent, or shared room rate. In Committee, we discussed the rationale for having the single room rent cut-off at age 25, as the lower average earnings for those under 25 limits the type of housing that someone in this age group can afford.
	The noble Lord is right to note that the adult rate for the national minimum wage is set for those aged 22 and older. The national minimum wage and the social security system share the same aim of increasing employment. However, it is important to note the difference between the two. The national minimum wage is intended to make work pay, but has a lower rate for those under 22 to ensure that young people are attractive to employers. The social security system, and therefore housing benefit, is intended to reflect an individual's needs but not to create a disincentive to move into work, a point touched on by my noble friend Lady Hollis. This leads us to consider again the fundamental principles behind the single room rent.
	In Committee, the noble Earl, Lord Listowel, spoke about the difficulties that some of the most disadvantaged young people in society face. He spoke of the perilous cycle of exclusion that may begin when a young person is denied the safe and secure upbringing from which many people benefit. Last Monday, I had the opportunity to meet the noble Lord, Lord Best, to discuss some of these issues further. I reassure the House that the Government share his concerns for young people. This is the age at which many young people complete their transition to adulthood. It is vital that the Government play their part to help them start adulthood in the best possible way.
	One of the principles behind the single room rent is fairness for working people. When 75 per cent of those who are under 25, single, without dependants and not receiving benefit live in shared accommodation, there is the principle that those who rely on housing benefit should expect only the same. More importantly, however, we do not want to put young people into a position in which they become dependent on benefits. If we were to abolish the single room rent for all or part of the group to whom it applies, we would extend the benefit trap for many more people. Those who might previously have found suitable shared accommodation would now be able to live in larger, more expensive self-contained accommodation, which would mean that they would have to earn a greater amount before being able to move off housing benefit and its taper and fully benefit from every additional pound that they earned. So the culture of benefit dependency would be extended. Instead of housing benefit providing an initial levelling platform for young people, it would provide another route of exclusion and dependence on the state, damaging future job and wage expectations.
	The noble Lord rightly spoke about the experience of the shared room rate and the local housing allowance pathfinders. We have learnt from this experience, and for national roll-out we will be using a different, broader definition of what can be counted as shared accommodation—I think the noble Lord, Lord Best, acknowledged this—and changing to the use of the median to calculate rates, which will help to address some of the problems of affordability reported.
	The noble Lord, Lord Best, suggested that the drop in the number of houses in multiple occupation, with its share of the whole rental sector decreasing from 9 per cent to 6 per cent, was measured over only two quarters and that therefore the time span was too short to link to any policy change. The local housing allowance evaluation has found that the proportion of landlords providing some shared accommodation remained about the same, despite a high degree of churn in the ownership of this type of accommodation. The noble Lord, Lord Best, suggested that landlords are unwilling to let to single room rent customers. There are many factors influencing who landlords let to. Two of the groups which landlords least like letting to are young people and benefit customers, but this is symptomatic of wider stigma and stereotypes. Abolishing the single room rent is unlikely to fix this. However, making local housing allowance payments to tenants is a step in the right direction. There is some indication from the pathfinders that customers on local housing allowance have been able to mask from their landlord that they are receiving benefit.
	We should recognise that many more vulnerable customers are eligible for social-sector accommodation, and the groups exempt from the single room rent include certain care leavers under 22. The noble Lord acknowledged, in relation to those who are severely disabled and those in the social sector, that the single room rent has only ever applied to private rented sector cases.
	Again, the noble Lord, Lord Best, talked about the cost of changing the arrangements. Twenty per cent represents the cost of moving existing claimants under 25 into the over-25 rate of benefit. If the cut-off point were under 21 the cost would be half of that, but that assumes that there is no behavioural change. In particular, it assumes that one does not have to go further and align the change to the benefits system more generally, as my noble friend Lady Hollis pointed out—the 25 per cent threshold is relevant for income support and jobseeker's allowance.
	It was suggested that those who lose their job must downsize, but the data show that 75 per cent of working people live in shared accommodation and therefore many would not downsize. This is the rationale behind the single room rent. My noble friend Lady Hollis raised the issue of discretionary housing payments, which, as the noble Lord, Lord Oakeshott, said we debated at Committee. I am advised that only in the very early years did any local authority spend anywhere near its discretionary housing payment limit. That is the centrally provided bit and the proportion that they can use from their own funding. I can assure my noble friend Lady Hollis that we are updating the guidance on the DHPs to ensure that it continues to assist local authorities to make full use of the discretionary scheme. Obviously we cannot dictate to local authorities precisely how they proceed but working with them is quite important.
	The noble Lord, Lord Best, talked about what was happening in the housing market. He said there had been an explosion in the number of small, self-contained flats and a dearth of shared accommodation. Would the impact on market rents not be an equalisation of those two parts of the housing sector? If there is a lot of self-contained accommodation, I presume that, all other things being equal, the price goes down and that, if there is a dearth of shared accommodation, all other things being equal, the price goes up. That must have an impact on the situation. I am sure that we will not readily reach a consensus on this issue tonight, but I have set out the Government's position, which I believe to be the correct one, and urge the noble Lord to withdraw his amendment.

Lord Best: My Lords, I am grateful to the noble Lord, Lord Oakeshott, and my noble friends Lord Listowel and Lord Northbourne for their support. I thank also the noble Baroness, Lady Hollis, who is such an expert in these matters. She raised the issue of not opening the door to the big ticket cost of having to shift jobseeker's allowance and income support rates from the age of 25 to 21 as a consequence of allowing this amendment. The Government do not have to change all the benefits because this one stands out in need of reform. It would be possible to change one benefit at a time if that is required by the marketplace.
	The noble Baroness, Lady Hollis, made the point that local authorities have discretion to make extra payments to vulnerable housing benefit claimants. It is extremely important that good advice is given to local authorities to make full use of this discretionary housing payments system. I am very pleased to hear from the noble Lord, Lord McKenzie, that such guidance is being prepared. As president of the Local Government Association I know that I should not support ring-fenced funds—I would get into big trouble—and it is probably not a route for this problem that would lead to a satisfactory conclusion.
	I am grateful for the response from the noble Lord, Lord McKenzie, but it does not encapsulate the realities of the marketplace. While it would be good for people to choose shared accommodation in preference to a self-contained flat and therefore become less dependent on the higher level of benefit that they would have to accept in a self-contained apartment, the realities are that the people we are talking about will not find flats to share with young professionals and others which they can enter. It is not an alternative or an option. The alternative is homelessness or living on other people's sofas and moving from house to house, which is the predicament in which we place so many people already.
	This is a matter of considerable significance and, despite the late hour—

Lord McKenzie of Luton: My Lords, I am sorry to interrupt, but I was remiss in not responding to the question asked by the noble Earl, Lord Listowel, on whether we could meet my noble friend Lady Andrews and the noble Lord, Lord Best, who I am not trying to deflect from what he is about to do. Notwithstanding the outcome of this democratic process, I would be happy to do that.

Lord Best: My Lords, it is very generous of the noble Lord to say "notwithstanding the outcome" of what follows. I should like to test the opinion of the House.

On Question, Whether the said amendment (No. 81) shall be agreed to?
	Their Lordships divided: Contents, 22; Not-Contents, 43.

Resolved in the negative, and amendment disagreed to accordingly.
	Clause 30 [Loss of housing benefit following eviction for anti-social behaviour, etc.]:

Lord Skelmersdale: moved Amendment No. 82:
	Clause 30 , leave out Clause 30

Lord Skelmersdale: My Lords, I suggest that since we have only four groupings of amendments to go, which will take slightly over half an hour, we continue until the end, as it seems extremely silly to have another day on Report just for a couple of groups of amendment.
	Clause 30 is a sanctions clause that allows housing benefit to be withdrawn for anti-social behaviour leading to eviction. In Committee, it was clear that every Member—except, of course, the Minister—was sceptical of the wisdom of doing this. A whole raft of amendments was tabled and, on a close reading of Hansard, it is apparent that the Minister, while criticising them, did practically nothing to defend the clause against the onslaught. We had hoped that our investigations about the clause would satisfy us that the opposition of all the lobby groups, even some local authorities, was misplaced. The only comfort that we received was when the Minister said in Grand Committee:
	"Post eviction, when support is offered and the household refuses to engage, an anti-social behaviour co-ordinator will consider whether a sanction is appropriate. This decision will be taken in discussion with relevant agencies. Exactly which agencies become involved will depend on the circumstances of the household and may include the police, social services, mental health agencies, children's services, housing managers, education or the Family Intervention Project".—[Official Report, 1/3/07; col. GC 287.]
	That was not enough, so this amendment is considerably tougher than those which we tabled in Committee. I do not like the idea of intervention post-eviction one little bit; indeed, I do not like the idea of eviction per se, because the claimant—it may well be a claimant family, as the list that I have just read out suggests—has to find somewhere else to live. As I said at Second Reading, and as the noble Lord, Lord Best, has just remarked, the amount of private rented housing available to people on benefit is a scarce resource. Moreover, if a claimant is evicted, word soon gets round the neighbourhood, and the only available housing is most likely to be local-authority owned. I cannot imagine many existing local-authority tenants relishing a previously evicted family coming to live next door. Support should therefore be provided before the point of eviction, which is itself a form of sanction. To deprive people of their housing benefit, in whole or in part, is to turn the screw too tightly. It is all very well for Ministers to say that they hope that things will never get to this point. Even if they do, the record shows that they believe:
	"In reality, we expect it to be used in very few cases".—[Official Report, 1/3/07; col. GC 291.]
	I do not believe that these financial sanctions will be used at all. The Minister in another place implied this. We have heard local authorities which are to operate this power state that they do not want it and will not use it. While I accept that it is optional as far as they are concerned, as subsection (4)(b) makes clear, an option that will not be used is no option at all. This clause is wrong whichever way one looks at it. It is an idea that was first floated in a housing Green Paper in 2000. After serious objections, not least from the Deputy Prime Minister, it was dropped. It has no place on the statute book today. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, the National Housing Federation, Shelter and Citizens Advice believe that these sanctions would punish the innocent family members of those evicted for anti-social behaviour and that, instead of tackling the problem at its root, the proposed policy would exacerbate social exclusion and lead to greater indebtedness and homelessness. We agree. There are plenty of effective ways to tackle anti-social behaviour—we support them—but this is not one of them. It could visit the sins of the fathers on the children. It is a typical cheap new Labour stunt—not intended to be used very much, but a good headline-grabber. Like the noble Lord, Lord Skelmersdale, we oppose the provision.

Lord McKenzie of Luton: My Lords, this clause seeks to introduce an incentive to households evicted for anti-social behaviour to take up offers of rehabilitation and support to address the causes of their problem behaviour. The intention is to introduce a sanction of housing benefit for those people who have already been evicted by an order of a court as a result of anti-social behaviour and are refusing to take up offers of help and support. Specifically, the clause will allow us to pilot the use of a sanction in around 10 local authorities, starting as soon as practicable, for two years only.
	In Grand Committee, we debated the evidence that providing intensive support and supervision can achieve both positive and significant changes in a person's behaviour. Given the strong evidence that such rehabilitation works, it is justifiable that a sanction of benefit should be linked to the refusal of such help and support.
	The provision of support services is now more widespread than ever, and we are continuing to invest in these services, as set out in the Respect Action Plan. I have listened carefully to the points made in this House about the need to protect the most vulnerable. Perhaps I may again list the safeguards that we have built in from the outset.
	There would already have been consideration by a judge of the household circumstances and any issues concerning vulnerability before a possession order was made. The local authority would have discretion in deciding the most suitable course of action and this would be discussed with the household concerned. For example, a referral to mental health services might be more appropriate than a benefit sanction. If a sanction is applied, it can be brought to an end at any stage by the local authority—for example, where members of the household are taking action to improve their behaviour. There will be an appeals process and a hardship regime where benefit will be reduced by 30 per cent, as opposed to a full withdrawal. As set out in the draft regulations, specific groups, such as households in which there is a child or caring responsibilities, will be able to claim the hardship rate.
	I assure the House that this sanction is not intended to be imposed widely. The scheme will be judged a success if the sanctions are never applied because that would suggest that the households involved would have engaged with rehabilitation. We strongly believe that the welfare state should combine rights with responsibilities. The right to benefit can only come with the responsibility to behave with respect for others. I believe that this proposal strikes the right balance.
	We have given assurances about the degree of parliamentary scrutiny which would be necessary for a national rollout under this clause. However, we accept that these assurances have not been enough to allay the concerns expressed in this House and in the other place. We will therefore return to this House on Third Reading with an amendment inserting a sunset clause. This will ensure that to roll out the scheme nationally, we will have to return to both Houses with primary legislation and all the scrutiny that that entails. In the light of that, I urge that the amendment be withdrawn.

Lord Oakeshott of Seagrove Bay: My Lords, we welcome that announcement. What will be the timing? What is the period before the sunset clause? How long until it lapses, if I can put it that way?

Lord McKenzie of Luton: My Lords, the intention is not to be able to go beyond the pilots. The pilots are for two years and we want to get those started as soon as possible. One could not go beyond that to roll out nationally without further primary legislation. That is the intention. If it is different, we will share our intent with noble Lords, perhaps before Third Reading.

Lord Skelmersdale: My Lords, I am most grateful to the Minister for that. Pressure in both Houses and from outside organisations has had a great effect on Ministers. I was aware of the local authority discretion in this matter. Indeed, I referred to it earlier. All relevant considerations will be made by a judge before the ultimate sanctions are applied.
	It is my contention that the pilots will be totally useless. They will not prove what the Government are seeking to achieve. Having said that, I like to think that I am fair and I am quite prepared to give the Government two years to prove me wrong.
	As I understand it, if the Minister's amendment means that, after two years, the pilots are over but the evaluation is not yet complete and they do not show that there have been any financial sanctions, it will be necessary for the Government to come back with primary legislation, should they want to introduce this on a national rollout. If I have got that right, I accept what the Minister has said word for word. I am grateful to him for going as far as he has. I will certainly take up the offer of discussing the final form of this sunset clause with him before that amendment is tabled. However, for the moment, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.
	Clause 36 [Payment of housing benefit]:

Lord Skelmersdale: moved Amendment No. 36:
	Clause 11, page 9, line 39, leave out "and how" and insert ", how and with whom"

Lord Skelmersdale: My Lords, in Committee we had a wide-ranging and reasonably productive debate about housing benefit being paid directly to the landlord, as happens in many cases. We established that housing authorities are expected to investigate whether a claimant can indeed handle their finances if a particular case is brought to their attention. That is clearly a step in the right direction, but it does not go far enough.
	The obvious person to identify whether a claimant can manage their housing benefit sufficiently well to avoid falling into arrears is the landlord. However, it is likely that the landlord will not even know that his tenant is in receipt of housing benefit and so will not know that informing the local housing authority might be helpful. How do the Government intend the notification procedure to work without increasing landlord awareness of both the possibility of intervention and who among their tenants is a benefit recipient, the latter being a significant infringement of privacy and therefore impractical?
	The amendment would make it the responsibility of the housing authority to make sure that recipients are indeed capable of handling their finances. If they do not, we run the risk of letting vulnerable claimants sink into arrears and face eviction, which is not the best way of introducing them to financial independence, which is the whole object of the exercise and on which we on these Benches agree with the Government. The question then is how best to pursue that policy, given the shortage of available private sector housing for people on housing benefit. I hope that the Government will consider the amendment seriously. The housing authority is the obvious body to monitor the benefits that it pays out. Non-governmental organisations have an important role to play in supporting recipients and highlighting problems, but the responsibility for that should not be placed at their door. We really need to know where we are going and what the result will be. I beg to move.

Baroness Morgan of Drefelin: My Lords, I am delighted to have the opportunity to discuss the amendment further this evening. Clause 36 provides powers for prescribing the manner in which housing benefit is paid to all types of tenants. We require that power to allow us to specify the payment method for certain categories of social housing. Before I respond to the amendment, I will clarify for the House once again what the Government's intentions are in the social sector. It is a priority for the Government to build financial inclusion and to encourage individuals, where possible, to take responsibility for their own affairs. One way of achieving that would be to enable customers in the social sector to take responsibility for paying their own rent. However, we realise that this may be difficult for some customers. So, as we have publicly committed, we will proceed cautiously with any reform of the social sector, ensuring that proper safeguards and support mechanisms are in place.
	In the private sector, we believe that a great many customers are ready to start managing their own payments, which is why one of the key features of the local housing allowance is that, in most cases, housing benefit will be paid to the customer. However, we will not force that responsibility on to those customers who are unable to exercise it. There will be safeguards to protect those customers, so that local authorities can determine whether the housing benefit should be paid to the landlord. This amendment would enable regulations to be made that would require local authorities to put every new customer through a long and potentially complex assessment procedure. The amount of information that all customers would have to provide would greatly increase. Much of the information would have to be of a private and confidential nature. The administrative burden on local authorities would increase and could lead to slower processing times and to all customers having to wait longer for their benefit. Local authorities may also require information from a greater number of sources, thus increasing information sharing between different organisations.
	I reassure the noble Lord that the amendment is not necessary. Currently, if a local authority receives notice that a customer might be vulnerable, it is obliged to investigate. The notice may be provided by the customer, the customer's family, welfare organisations or healthcare professionals. The local authority will also pay housing benefit to the landlord if a customer is eight weeks in arrears or more and if that is in the customer's best interest. That helps to mitigate the risk of eviction, about which the noble Lord, Lord Skelmersdale, is so concerned, as it aligns with the point at which a landlord would be able to file for eviction of a customer on rent arrears grounds. In many cases, local authorities will act much earlier than that, so that if customers experience problems they will intervene. In addition, each local authority will have its own procedure to identify those customers who cannot manage their own payments, without having to investigate claims.
	Using the evaluation of the local housing allowance pathfinders and comments from the welfare organisations working with us, we will provide comprehensive guidance to local authorities. Our experience from the pathfinders has shown that the procedures in place to identify vulnerable customers are working extremely well. I hope that noble Lords will take comfort from that. Only 4 per cent of pathfinder customers have their housing benefit paid directly to the landlord because they have fallen eight weeks into arrears. A further 12 per cent have it paid to the landlord because the local authority has identified that they might struggle to manage their financial affairs. The remaining 84 per cent of customers are receiving and successfully managing their own payments. Indeed customers in pathfinder areas were more likely to report being up to date with their rent payments than those in the control areas with which the pathfinders were compared.
	I know that noble Lords are concerned about ensuring that we have a proper variation in conditions for control areas and a wide variation in locations that are used for pilots. That is an extremely important point. The processes and policies in place are working, and there is nothing to suggest that they will not do so in future. Therefore, I urge the noble Lord to withdraw the amendment.

Lord Skelmersdale: My Lords, I notice that on this occasion the noble Baroness did not use the word "overkill". I agree that the priority should be to build financial inclusion, as I said in introducing the amendment. I accept that the Government are proceeding cautiously on this. I was pleased to hear—I had not heard it before—that 86 per cent of recipients of housing benefit in the pilot areas were operating this successfully. That still leaves another 24 per cent and that is the group that I am worried about—

Baroness Hollis of Heigham: My Lords, it is 14 per cent.

Lord Skelmersdale: My Lords, it is getting late; my maths is never up to scratch but it is even worse than usual. I am clearly concerned about the 14 per cent and the noble Baroness is right about the possibility of their eviction. I am concerned that eight weeks seems to be rather a long time. If a landlord is not paid for eight weeks, it is likely that he will have instigated proceedings for eviction by that stage. It will be interesting to see how the pilots proceed and whether the 14 per cent figure goes down. At this time of night, there is no alternative but to withdraw the amendment—although, even if it had been 3.30 in the afternoon, I would still have withdrawn the amendment.

Amendment, by leave, withdrawn.
	Clause 40 [Social security information]:

Lord Taylor of Holbeach: moved Amendment No. 84:
	Clause 40 , page 33, line 4, after "information" insert ", excluding patient data,"

Lord Taylor of Holbeach: My Lords, our amendments in this group are twofold. First, I would like to exclude patent data from the information that public authorities may share with each other. Secondly, I would like to ensure sufficient parliamentary scrutiny of the regulations that will govern how these data are to be shared. The aim of this clause is to allow the department to share what information it has on benefit recipients with local authorities. I hope that this will have two positive results. One is that fraud will be tackled more efficiently; after all, if a person is illegally claiming a benefit such as income support, it is possible that he is also claiming other benefits, such as housing benefit, illegally and vice versa.
	The clause should also allow a claimant to receive related benefits more easily. If they have established their eligibility for one Department for Work and Pensions benefit, sharing information may well make their eligibility for other benefits, such as disability living allowance, more apparent. However, there must be limits to this information sharing. While we are very happy that the Government are improving their ability to tackle fraud and trying to improve benefit uptake, these measures must not infringe on claimants, privacy or put confidential information at risk.
	Our first amendment is designed to ensure that patient data are not shared under this clause. By patient data, I mean health information about a claimant combined with information about their identity. Both pieces of patient data will continue to be able to be shared separately. After all, the identification of an individual as a recipient of ESA might be necessary to combat fraud. Similarly, a Jobcentre Plus in one part of the UK might want to share statistical information with another centre in a different part of the country on how many patients of a certain disability they have managed to move off benefits. What is not appropriate is that these two pieces of information are combined, so that a housing authority, for example, will be able to look at this information and know that a certain recipient of housing benefit is also suffering from a certain disability. This combination of health and identity information would be considered confidential. The exclusion of patient data is a principle that has been accepted by the Government in the Serious Crime Bill, also going through this House. I hope that the Minister will be equally amenable to the principle here. I beg to move.

Lord Addington: My Lords, the principle of protecting data is important. The general point that has been raised is important. I hope that the Minister, whose amendment is grouped with these, will be able to give us a little more clarification about what the Government are going to do to address these concerns.

Baroness Morgan of Drefelin: My Lords, I hope I can do that without going on for too long. First, I will speak to government Amendment No. 86. This is a minor amendment consequential to the government amendments to Clause 40 approved in Grand Committee. Those amendments addressed concerns raised by the Delegated Powers and Regulatory Reform Committee and the Joint Committee on Human Rights on one aspect of Clause 40, which deals with the use of social security information.
	The proposal of a new Section 7B in the Social Security Administration Act 1992, which was originally worded to enable the prescription of benefit take-up activity through regulations, was amended so that such activity is now set out in the Bill. Another feature of Clause 40 is that it will enable English county council staff to perform certain social security functions for the first time, including promoting such benefit take-up by using social security information that they hold. It is in this connection that the consequential amendment is needed.
	Under Section 123 of the Social Security Administration Act 1992, it is a criminal offence for persons employed in social security administration to make any unauthorised disclosure of information. Clause 40(3) extends the definition of,
	"persons employed in social security administration",
	in Schedule 4 to the 1992 Act so that it applies to English county council staff. Noble Lords will be pleased to hear that it already covers DWP staff and local authority housing benefit staff. The definition currently in Clause 40(3) refers to:
	"A member, officer or employee of a county council who exercises ... any function ... specified in regulations made under section 7B".
	However, we need to reflect the fact that the functions concerned—namely, assisting and encouraging persons to claim benefit—now appear in the Bill in new Section 7B(3) and will not be specified in regulations, as originally intended. This consequential amendment therefore brings subsection (3) of Clause 40 in line with subsection (1).
	Amendment No. 84 would prevent patient data being used for a relevant purpose. Here, a "relevant purpose" means identifying persons who may be entitled to certain benefits and encouraging, advising or assisting them to make a claim for one or more of those benefits in order to encourage and increase benefit take-up.
	I take "patient data" to mean medical information or evidence provided by the customer or obtained with their consent, as these are the only data about a customer that a relevant authority will hold. I shall return to this later.
	I appreciate that the use of medical data must be subject to limitations, but perhaps I may offer the following assurances as to why this amendment is unnecessary. Any medical information obtained is classed as sensitive personal information for Data Protection Act purposes and is subject to more stringent safeguards than the use of other personal information.
	One function of Clause 40 is to enable local authorities administering housing benefit and English county councils to promote the take-up of benefits administered by the DWP. The benefits, which are listed in draft Regulation 6, paragraph (3), include those where the provision of medical evidence in support of a claim is necessary, such as incapacity benefit, employment and support allowance and disability living allowance. If local authorities were prevented from using medical evidence and information, that would restrict benefit take-up.
	Another function of this clause is to support the operation of joint teams. Joint teams bring together staff from the DWP, English county councils and local authorities administering housing benefit. They work together to visit people—primarily pensioners—to encourage and help them to make claims for the benefits and other services to which they may be entitled. Because team roles are interchangeable, patient data may be collected by local authority staff in support of the claims to a benefit administered by the DWP.
	Customers are not required to make a claim or provide evidence to joint team staff. Where they do so, it is with their consent and on the understanding that such information may be shared as necessary in support of their claim to benefit. The customers remain in control throughout and can opt to make their claim direct to the DWP or the local authority administering housing benefit if they prefer.
	As I mentioned, there are restrictions under this clause on the purposes for which an authority can use the medical evidence that it obtains. The purposes are set out in primary legislation at Section 7B(3) and concern identifying, assisting and advising in relation to making a claim to benefit. It follows that only relevant and necessary medical information and evidence would be collected in relation to such functions.
	I can further assure noble Lords that any medical information obtained is classed as sensitive personal information for Data Protection Act purposes and is subject to more stringent safeguards than the use of other personal information. The department, local authorities and English county councils are bound by the principles of the Data Protection Act in their use of personal information. As I have said previously, staff are subject to Section 123 of the Social Security Administration Act, which makes it a criminal offence to disclose information without lawful consent.
	I have set out what this clause in part enables, and the safeguards that are and will be put in place. Let me be equally clear about what this clause does not enable. It will not permit relevant authorities access to wider medical information than they have currently. They will not be able to access full medical data such as GP records or NHS databases. I wish to be absolutely clear about that because one or two noble Lords may have hinted at that on Second Reading, so it is important to put that on the record. Nor will the clause allow any patient data to be collected or shared unless they have been provided by the patient or obtained with their consent to support their claim to benefit.
	I do not want to speak at length now about Amendment No. 85 because we had a discussion about affirmative regulations. I understand that the noble Lord, Lord Skelmersdale, and the Minister will discuss this issue further. I do not want to keep noble Lords with what I am afraid to say are about three or four more pages of speaking notes. I urge the noble Lord—

Lord Skelmersdale: My Lords, this is a proposed affirmative resolution to a totally different part of the Bill. Therefore, it would be helpful if the Minister would say what she can on the subject.

Baroness Morgan of Drefelin: My Lords, I am happy to do so.
	In that case, accepting Amendment No. 85 would mean that regulations made under new Section 7B(2) would be subject to the affirmative parliamentary procedure. I have mentioned previously some of the aspects of this clause that relate to how information that is shared between relevant authorities may be used. Section 7B(2) is concerned with the processes that should be followed when certain information is received by a relevant authority from a different relevant authority.
	The draft regulations available to the House show how the Government propose to exercise the powers in subsection (2) of the new Section 7B. Briefly, the draft provides that if information has been used in relation to a claim to benefit by one relevant authority—a local authority administering housing benefit or the DWP—or has been verified by a relevant authority, including English county councils, a subsequent relevant authority that receives this information must, subject to certain safeguards, use it in connection with a claim for an award of benefit that it administers without carrying out further checks as to its accuracy.
	The intention is to ensure that if a customer has submitted information or evidence to one relevant authority, he should not have to submit the same information again to another relevant authority. This will improve the service to customers in making claims to benefit and will improve administrative efficiency.
	Making these regulations subject to the affirmative procedure would mean that new Section 7B(2) of the Social Security Administration Act 1992 would be out of line with existing Section 7A, inserted by the Welfare Reform and Pensions Act 1999. Section 7A allows for regulations to be made setting out the processes that are to be followed by, for example, a local authority which receives a claim for state pension credit. The negative procedure applies there. The Government's view is that it would be rather excessive for the regulations under new Section 7B, which are about how local authorities process claims, to attract the affirmative procedure. Certainly, this appeared to be the view of the Delegated Powers and Regulatory Reform Committee, which made no recommendation in respect of this particular provision in Clause 40. I urge the noble Lord to withdraw the amendment.

Lord Taylor of Holbeach: My Lords, I thank the Minister for that full exposition of the situation. Amendment No. 85 has been covered because we have expressed our view that Parliament has a role in scrutinising the way that legislation moves forward. I am satisfied that the Minister has taken on board the need for confidentiality in statistical data. I hope that she is confident that the affirmative way in which people volunteer information will mean that it is safeguarded so that when it is requested people know full well that it will be kept confidential. That can only be done on a consensual basis. There would be considerable concern if this information were passed on through third parties to someone else. It would probably be done in a well-meaning way, but it would not necessarily serve the long-term interests of the confidentiality of the claimant. As we have received those assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 85 not moved.]

Baroness Morgan of Drefelin: moved Amendment No. 86:
	Clause 40, page 34, line 26, leave out from "a" to end of line 27 and insert "relevant purpose within the meaning of section 7B(3) of this Act."
	On Question, amendment agreed to.

Baroness Thomas of Winchester: moved Amendment No. 87:
	After Clause 48, insert the following new Clause—
	"Social Security Advisory Committee
	Social Security Advisory Committee: remit
	In section 173 of the Social Security Administration Act 1992 (cases in which consultation is not required) subsection (5) ceases to have effect."

Baroness Thomas of Winchester: My Lords, I shall also speak to Amendment No. 88. Both amendments concern the remit of the Social Security Advisory Committee. Under the Social Security Administration Act 1992, draft regulations made within six months of the parent Act need not be referred to the Social Security Advisory Committee. That means that the Secretary of State and Parliament are denied the expertise of that committee when considering such regulations in draft form because many of them are, by necessity, made within six months of the parent Act's coming into effect. Parliament and, I should have thought, the Secretary of State would find such expert views extremely helpful at a critical stage when a new benefit scheme is being set up. Professor Hazel Genn's quinquennial review of the Social Security Advisory Committee recommended that this rule be abolished. In its 19th report, the SSAC stated that it was still working with the department on the implementation of the recommended strengthening of its role in relation to regulations laid within six months of an Act coming into force and that it is able to offer informal comments and advice, presumably to the Secretary of State. However, that does not mean that a report is published for Parliament to see.
	Amendment No. 88 relates to the fact that the SSAC's remit used to cover guardian's allowance and child benefit before the administrative functions in respect of those social security benefits were transferred under the Tax Credits Act 2002 to what is now Her Majesty's Revenue and Customs. The amendment would remedy this. Since 2002, this valuable committee has not been able to report to Parliament on draft regulations relating to child benefit and guardian's allowance before they pass into law. I understand that under a memorandum of understanding HMRC may seek advice from the committee but it must remain confidential. Although we would like to see all benefits administered by HMRC brought within the remit of the SSAC, we recognise that the Long Title of the Bill permits amendments to be made concerning child benefits and guardian's allowance only.
	The Work and Pensions Select Committee and Professor Hazel Genn's report recommended extending the remit of the SSAC. Can the Minister tell the House why the Government do not think it would be appropriate to extend the SSAC's statutory remit in the way suggested? It would greatly help both Houses of Parliament to scrutinise effectively important delegated legislation in this field before agreeing to it. We should not let this legislative opportunity go by without trying to change the remit of this important committee. I beg to move.

Lord Kirkwood of Kirkhope: My Lords, this has been departmental unfinished business for a number of years, as I know to my cost. In a previous incarnation I was part of a Select Committee that looked at this area in some detail. To an extent, it is not just unfinished business but there is credibility at stake in some respects.
	In the days of the Social Security Administration Act 1992, statutes of a social security nature were extensive and laid out in some detail. Most of the detail was contained in the primary sections of the primary legislation. Things have changed; the older I get, the more I can see the force of enabling legislation that can be fleshed out in statutory instruments and delegated legislation. The rationale in 1992 was that the department was entitled to six months' respite, if I can put it that way, because the primary legislation contained all the necessary detail to foresee what would happen in the immediate aftermath of the primary statute.
	That has certainly changed in this legislation, if it had not done before. I absolutely support the Government's perfectly understandable intention to set out the framework as they have in this enabling legislation and to back it up later with SIs and delegated secondary legislation. The whole way of developing social security statutes has changed, which everyone from the social security committee to the DWP committee and the quinquennial review under Professor Hazel Genn recognised, as did Andrew Smith. When he was Secretary for State in the last Parliament, Andrew Smith gave a clear commitment that he could see the force of how the system had changed, demonstrating a need to remove the protected six-month period to which the department was able to cleave.
	The last time that the Social Security Advisory Committee looked at this, in its 19th report, it suggested that it was making progress with the department in getting that principle accepted. It seemed that we were almost getting to the stage of saying, "Don't worry; let's try it this time with this Bill on welfare reform, and in the next social security legislation that comes along we will get the amendment to the 1992 SSAA". That Act needs to be changed to put right the situation.
	This amendment, which my noble friend moved so eloquently, makes a clear case, even at this late hour, that we should be making the change and giving the Government time to implement it as and when they feel it appropriate. That would seem the culmination of a series of iterative, evolving discussions with the department. This is the moment when we should take the chance, as it might not come again for some time, which would be a shame.
	If we do not take that opportunity, the Government are saying that they do not value the Social Security Advisory Committee's contribution to the legislative process, because some people in the pressure-group community outside are beginning to wonder whether there has been a deliberate attack on the extent of the SSAC's remit. This is one element of that discussion. The Government have to be careful that they do not undersell or diminish the role of the Social Security Advisory Committee. Amendment No. 87 would be an important signal that they understood.
	There are conditions in the SSAC's 19th annual report to the effect that if, for example, we take the six-month rule out, we could start in Committee to point to some of the regulations and statutory instruments that could be the subject of scrutiny within the six-month period. This is an important moment this evening for the Government to explain clearly whether they are going to take this opportunity that the amendment clearly gives them. If they do not take it, there will be far-reaching consequences for the Social Security Advisory Committee and all the valuable work that it does.
	Briefly, on Amendment No. 88, again the credibility of the department is being tested. The guardian's allowance and child benefit are benefits that are administered quite clearly under the Social Security Administration Act 1992, which is the pin Act of all eligibility for benefits as currently cast. The Tax Credits Act 2002 changed that. I believe that there were some misunderstandings after the 2002 legislation, because there were some very clear assurances that the consultation process with the Social Security Advisory Committee would not be downgraded in any way. Clearly it has been. As my noble friend argued eloquently on an earlier amendment, the new memorandum of understanding arrangements for the guardian's allowance, child benefit and the tax credits, which we cannot technically talk about under the Long Title of this legislation, are simply not adequate for the purpose. They are, as my noble friend said, confidential to the department. The whole model of Social Security Advisory Committee processes has been established so that SSAC members may advise Parliament. They do so through the Secretary of State, but they advise Parliament, and for a memorandum of understanding merely to advise government through HM Revenue and Customs is wholly different. It is totally removed from the ability to ensure that when we deal with delegated legislation in the revising Chamber, we have the advantage in cold print of the views and expertise of the Social Security Advisory Committee secretariat.
	Moreover, the SSAC's work is intrinsic to the statutory process. If the Minister tried to introduce secondary legislation without reference to the SSAC, there are circumstances in which delegated legislation, even if the SSAC said that it had nothing to say about it, would be flawed and subject to contest. It is, and always has been, an absolutely intrinsic part of the social security statutory process. The other thing about memorandums of understanding which I do not like is that they are entirely discretionary. They are at the behest of Ministers and cannot be required by anyone outside Revenue and Customs bureaucracy.
	Perhaps one of the most damaging things about memorandums of understanding is that they do not admit of external consultation. No one else can do as SSAC members do when they formally consult under the SSAC normal model for social security scrutiny. SSAC members can talk to the pressure-group community, academics and others. Indeed, they have a very good reputation for doing so. People know why they are being asked the questions that the SSAC asks them, and they know that the information is being put to good purpose for parliamentary scrutiny which, under the memorandum of understanding role suggested in relation to the guardian's allowance, child benefit and the tax credits, the SSAC cannot currently do.
	Finally, assurances—I certainly took them to be assurances—were given in the aftermath of the Tax Credits Act 2002 that these things would eventually be put right. Assurances were given that the consultation would be at least equivalent to the SSAC social security model through the memorandum of understanding. I do not believe that that has happened.
	For all these reasons, the credibility of the department is at stake. I know that the Minister is too tough a cookie to be bullied by his Treasury colleagues, who say, "Hands off tax credits. Customs and Revenue are not having anything to do with this namby-pamby consultation that DWP Ministers are saddled with. Get out of my face; I don't want any of this round my neck". I am sure that he is able—at least I hope that he is big enough—to stand up to that kind of pressure, because this is a serious issue. If this is the shape of things to come and Treasury Ministers move on to higher and better things, the social policy that we may see coming from the Government for the remainder of this Parliament will start taking on that hue, rather than going back to the tried and tested systems.
	I do not need to tell the Minister that the Social Security Advisory Committee is a cherished part of the consultation process in social security law, as it has been for years. If the Government do not send out the right signals in addressing these two amendments appropriately, there will be worries out there that that commitment is being eroded, if not being lost altogether.

Lord Skelmersdale: My Lords, inclined as I am to agree with the thinking behind these amendments, it is only fair for me to say that Section 173(5) of the Social Security Administration Act is a sensible procedure in many cases, but not for this Bill. If a regulation is to be enacted within six months of the Bill, it is to be expected that draft regulations and so on will have been fully scrutinised and debated by both Houses and that concerned parties will have had an opportunity to comment. No doubt such words will very shortly be sopken by the Minister. But we have seen from the lengthy and sometimes rather confused debates on certain clauses in Part 1 that there is much about the regulations that is still not clear, despite the best attempts of the Government to give us advance sight of as much material as they can and their helpful attempts to explain the points that we have raised.
	It is unfortunate that it is only now—nearly halfway through the Bill's progress, after it has already passed through another place—that we are making any real progress in unpicking the confusions that remain. I therefore think that there is a strong argument for making an exception for this Bill, which, as is repeatedly said, makes extensive changes to the system of benefits for disability, and for the Minister to assure us that all the regulations that are needed to implement its provisions are fully consulted on by SSAC.
	As far as Amendment No. 88 goes, the problem is that great chunks of social security have been pinched by the Chancellor of the Exchequer, and the department is a pale shadow of what it once was. The Chancellor and his team have a different way of looking at things. I agree with the noble Lord, Lord Kirkwood, that it was quite wrong at the time to cut out SSAC and it is just as wrong now.

Lord Oakeshott of Seagrove Bay: My Lords, I wonder whether I could make one brief point, as this is probably my last chance to speak in the late, late show. I want to congratulate Ministers and officials on the constructive, even consensual, approach that they have shown in our deliberations. I ask that the important amendments that they have said they will bring forward—particularly in relation to Amendments Nos. 89, 46, 47 and 82—will be produced as soon as possible, preferably tomorrow. We are almost into Tuesday now, so there is only a week to go. It is essential to give people the widest opportunity to see them before we have to decide whether to support them next week—as I hope we will be able to.

Lord McKenzie of Luton: My Lords, I start by thanking the noble Lord, Lord Oakeshott, for his kind comments and by trying to address the point that he raised about the timing of amendments. I cannot commit that this will be done tomorrow without talking to officials, but I understand the need to get it done as soon as we can so that people have a real opportunity to focus on them and be satisfied that they address the points that we maintain they will.
	The Social Security Advisory Committee does an important job very effectively and my right honourable friend the Secretary of State, John Hutton, and other Ministers meet the committee on a regular basis. From our perspective, the relationship is dynamic and fruitful. The committee's informal and formal scrutiny of the majority of amended regulations before they become law and its meetings with officials and Ministers about proposed policy developments have helped successive Governments make better rules under which benefits are claimed.
	Amendment No. 87 would remove the provision in Section 173(5) of the 1992 Act which precludes referral to SSAC of regulations made within six months of a relevant enactment. Following recent dialogue with the committee, Ministers reached the view that this limitation should remain in place. The SSAC's current remit does not extend to scrutiny of draft regulations made under powers recently enacted by Parliament. "Recently" means the long-established period of six months following commencement of the relevant power. Referring such regulations to the committee for further scrutiny would jeopardise the timely implementation of the policy set out in the legislation so recently approved and scrutinised by Parliament. This amendment does not sit very comfortably with this Bill. It follows extensive consultation on our plans for welfare reform where we have published the key draft regulations to which the public, SSAC and the Disability Employment Advisory Committee have had access and where we have updated the regulations document before this Bill was placed before your Lordships' House.
	Finally and very importantly, the amendment would pre-empt the outcome of the non-statutory trial which SSAC and the department are currently operating, which aims to provide the committee with more comprehensive information on the Government's intentions. The trial involves the Bill now before your Lordships, the Pensions Bill and the regulations that may be proposed if these Bills are enacted. It offers increased scope for SSAC to make its views known at an earlier stage than in the past. When the trial is complete SSAC will produce a report and the Government will decide what implications there may be for SSAC's future functions. The Government will of course make public their conclusions.

Baroness Thomas of Winchester: My Lords, will the report be produced for Parliament or will it be made public?

Lord McKenzie of Luton: My Lords, I confirm what I have said: the Government will make public their conclusions. I hope that noble Lords will accept that in the context of what is going on, it would be pre-emptive to proceed with this amendment. It is right that this process be concluded and for the Government to publish the conclusions of the report.
	Amendment No. 88 would place a statutory duty on HMRC to consult the SSAC on secondary legislation relating to guardian's allowance and child benefit. The fact that SSAC has a statutory role in relation to the benefits system does not read across to the tax system and other HMRC business. The Government have consistently made it clear that it is not necessary or logical to take new statutory powers. The amendment appears to ignore the fact that SSAC already has a channel to put its advice to Treasury Ministers on a range of HMRC business, including guardian's allowance and child benefit. The amendment ignores the existing Memorandum of Understanding, which sets out how HMRC and SSAC conduct their business. I should emphasise that HMRC and SSAC willingly accepted the terms and conditions of the memorandum only after months of discussion and debate between the two parties. The noble Lord expresses some surprise at that contention.

Lord Kirkwood of Kirkhope: My Lords, Professor Genn is not an interested party to this. I think her views were slightly different. Would the Minister not acknowledge that?

Lord McKenzie of Luton: My Lords, I am sure that there are some people who would take a different view. I am expressing the view I believe to be correct. This was entered into by agreement between the two parties. Treasury Ministers are able to obtain the freely and frankly expressed views and the expertise of SSAC. Treasury Ministers take the view that the disclosure of SSAC's advice would be likely to inhibit the free and frank provision of advice or could prejudice the effective development of policy. The confidentiality of that advice recognises that the Chancellor has responsibility to deliver the Government's aims of delivering a single system of support designed to make work pay and of reducing child poverty. He also has to make those decisions in the context of his overall economic responsibility as part of the Budget process.
	The proposed amendment would be made to a DWP Bill and ignores the opportunity for HMRC and the SSAC to determine, by mutual agreement, the content of the MoU and the way in which arrangements covered by it will operate. The memorandum is about to be reviewed, with both sides agreeing the terms of that review. It would be pre-emptive to press this amendment in light of that situation.
	I hope that these explanations have totally convinced noble Lords and I urge the noble Baroness to withdraw the amendment.

Baroness Thomas of Winchester: My Lords, it is clear that not everyone on these Benches has been convinced, but I thank my noble friend for being so enthusiastic in his support for the amendment. The noble Lord, Lord Skelmersdale, was enthusiastic for one of the amendments, at least. We do not want the SSAC to be forced into a private conversation with the Government about these very important regulations. I do not think that the situation is satisfactory. After all, Professor Genn made her views very clear in the quinquennial review. However, at this late hour, noble Lords will be pleased to know that I will not press the amendment to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 88 not moved.]
	Clause 61 [Medical examinations]:
	[Amendment No. 89 not moved.]
	House adjourned at 11.01 pm.